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Dundas & Wilson, the Scottish law firm, has expanded its tax practice south of the border with the hire of Jim Hillan from Tite & Lewis in London. Hillan specializes in corporate and real estate tax and has practised at both Clifford Chance and Ernst & Young.

Roger Burrows, a former partner at PricewaterhouseCoopers specializing in value-added tax (VAT), joined Grant Thornton in London on August 17 2004. Burrows, who began his career at Customs & Excise, will lead Grant Thornton's 40-strong indirect tax practice as the firm's new national head of VAT.

Mukesh Butani: Very welcome trend The Indian Central Board of Direct Taxes (CBDT) released a draft circular on August 9 2004 that refines the definitions over the taxation of business process outsourcing (BPO) by multinational companies. The CBDT will revert to transfer-pricing principles to determine which BPO activities are taxable.

The big four firm has lost Richard Snowden who has left to head up Henry Davis York's tax practice. Snowden specializes in banking and financial services. He cited restrictions in the US on accounting firms providing non-audit services to audit clients as one of the reasons for his move.

Pursuant to the 2004 tax law amendments, a real estate investment corporation (J-REIT) can hold 100% of the preferred investment certificates issued by a Tokutei Mokuteki Kaisha (TMK). Previously this was not allowed, because such an investment would not meet with one of the requirements for dividends distribution deduction.

In two documents, the IRS has updated rules for getting an advance pricing agreement (APA). With an APA, the IRS and a multinational taxpayer agree on one or more transfer pricing methodologies to cover the taxpayer's cross-border transactions for a multi-year period.

Revenue Ruling 2004-76 held that a foreign corporation (A), formed under the laws of country X, could not claim the benefits of the income tax treaty between the US and country X if under the income tax treaty between country X and country Y, it is treated as a resident of country Y. This ruling may limit planning options for companies that are treated as a resident under the laws of more than one country that has entered into a modern income tax treaty with the US. The ruling may also cause headaches for US withholding agents.

Example 1 One of the miscellaneous amendments to the loan relationship regime in the Finance Act 2004 (FA) was to amend the rules relating to the taxability of releases of debts where the parties are connected but where one (or both) is in some form of insolvency proceedings. This can often occur when a subsidiary is sold and before the sale the debt owed by that subsidiary is written off to tidy up its balance sheet.

The Mexican Institute for Social Security released on its website on June 29 2004 an agreement on social security contributions signed between the governments of Mexico and the US (the Social Security Covenant).

Sed Crest discovers the top ten problems facing tax directors doing business in Asia and the top ten ways they want their tax advisers to improve