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New York is rife with rumours of two different groups of former Andersen tax partners looking to set up specialized corporate tax boutiques in the US. After the demise of Andersen in 2002, most the firm’s tax advisers in the US joined Deloitte and Ernst & Young.

Marc De Munter, formerly a tax specialist with Freshfields joined DLA’s Brussels office last week. Joining the firm’s expanding tax practice, De Munter will work alongside Dirk Caestecker and Jeroen Gobbin. DLA is expanding their tax services and now has 95 lawyers in their Brussels office.

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

The US Treasury and the Internal Revenue Service issued proposed regulations last Thursday providing guidance for determining a US shareholder’s pro rata share of income for controlled foreign corporations (CFCs) under the subpart F rules. The proposed regulations provide detailed rules on distributions of earnings when a CFC has multiple classes of stock. When issued in final form the regulations will be effective for tax years beginning January 1 2005.

The new accounting standard for the impairment of fixed assets will go into effect for fiscal years starting on or after April 1 2005. However, since early adoption was permitted for fiscal years ending on or after March 31 2004, some companies have already adopted the new standard.

The use of Entidad de Tenencia de Valores Extranjeros (ETVE)s by international investors has increased dramatically in the last few years. Both Spanish and non-Spanish newspapers and other publications have reflected this by emphasizing the fact that most large multinationals already have in place an ETVE structure (see the article in Cinco Días, a Spanish economic newspaper, on April 22 2003). More recently, Cinco Días also reported on May 24 2004, that a substantial part of foreign investment coming into Spain in the last few years was made through ETVEs.

Michael Cullen, New Zealand’s minister of revenue, has announced the start date for changes to the treatment of financial services under the country’s goods and services tax

Mukesh Butani, Ernst & Young’s national tax director in India since June 2002, is leaving the position on August 15 2004 amid talk of turmoil at the firm. A number of partners, including Jairaj Purandare, Ernst & Young India’s chairman, and Rajiv Dimri, the head of indirect tax, have resigned from the firm in the last two-and-a-half months. Purandare became chairman on April 1 this year.

Promoters of potentially abusive tax reduction schemes will have to declare them to the UK Inland Revenue from August 1 2004. Similar rules for value-added tax (VAT) also came into force. The VAT disclosure rules require businesses using VAT reduction schemes to notify Customs & Excise.

In a report released last Friday in Washington, DC, the International Monetary Fund (IMF) has recommended broadening the US tax base for businesses including a federal sales or value-added tax and higher taxes on energy use