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When the largest democracy in the world unexpectedly changes its government, you might expect corporate tax directors to examine their strategies anxiously. But in an interview with Rupak Saha, country tax leader at GE in New Delhi, Simon Briault discovers a period of stability and optimism in India that has been unaffected by political change and looks set to continue

Type of deal Valuer Acquirer Target Adviser to acquirer (tax) Adviser to target (tax) M&A Undisclosed Petrochemical Industries Company of Kuwait Dow Chemical Company KPMG, London, Andrew Gavan, James Madams; Toronto, Steven Hurowitz; Ashurst, London, Richard Palmer, Klaus Herkenroth; Ogilvy Renault, Toronto, Adrienne Oliver In-house; Charles Hahn, Jean-Pierre Lallement M&A Undisclosed Rayovac Corporation Varta agreed to sell its majority stake in Microlite Linklaters, São Paulo, Gustavo Haddad, Bruno Carramaschi Sutherland Asbill & Brennan M&A £270 million ($491 million) Land Securities Group and Delancey announced the creation of the Metro Shopping Fund The joint venture between Land Securities Group and Delancey is a limited partnership structure to set up shopping centres and shops Land Securities Group was advised by Slaughter and May, London, Graham Earles, Gareth Miles Delancey was advised by Olswang, London, Matt Ford M&A ?2 billion ($2.41 billion) Volkswagen Group Lease Plan Corporation Haarmann Hemmelrath, Amsterdam, Roderik Bouwman Allen & Overy, Amsterdam, Olaf van der Donk M&A Undisclosed Texas Pacific Group and Credit Suisse First Boston Private Equity BC Partners agreed to sell Grohe Aktiengesellschaft Weil, Gotshal & Manges, Munich, Tobias Geerling; New York, Marc Silberberg CMS Hasche Sigle M&A $2.03 billion National Grid Transco Crown Castle International agreed to sell its UK subsidiary Linklaters, London, Jonathan Richards Cravath, Swaine & Moore, New York, Lewis Steinberg, Aliza Levine; Norton Rose, London, Dominic Stuttaford, John Challoner, Andrew Roycroft M&A £863 million ($1.57 billion) ING Lease (UK) Abbey National Clifford Chance, London, John Gower, Douglas French, Nina Buchan Slaughter and May, London, Clare Richardson M&A $3.24 billion The May Department Stores Company Target Corporation agreed to sell the Marshall Field business unit and nine Mervyn's store locations to The May Department Stores Company Skadden, Arps, Slate, Meagher & Flom, New York, Sally Thurston Faegre & Benson, Minneapolis, Thomas Mayerle M&A DKK2.33 billion ($380 million) Englefield Capital and Electra Partners Europe agreed to acquire Global Solutions from Group 4 Falck Group 4 Falck agreed to sell Global Solutions Ashurst, London, Patricia Allen advised the management of Global Solutions Group 4 Falck was advised by Norton Rose, London, Louise Higgenbottom, Dominic Stuffaford M&A $1.65 billion The Carlyle Group Verizon Communications agreed to sell its Hawaiian operations to The Carlyle Group Latham & Watkins, New York, David Raab In-house M&A Undisclosed Reliance Group Deutsche Bank agreed to sell Trevira Linklaters, Cologne, Sebastian Benz, Markus Sellmann Deutsche Bank was advised by Hengeler Mueller, Frankfurt, Martin Klein; Trevira was advised by Ernst & Young, Berlin, Peter Jegzentis M&A $550 million Bain Capital Rhodia agreed to sell its North American phosphates business Kirkland & Ellis, Chicago, Jeffrey Sheffield; New York, Steven Clemens Shearman & Sterling, New York, Don Lonczak M&A ?660 million ($798 million) Wendel Investissement Lagardère agreed to sell the Editis publishing business Bredin Prat Slaughter and May, Paris, Pierre-Pascal Bruneau, Yves-Charles Zimmerman, Eric Bérengier Type of deal Value Issuer Lead managers Adviser to Issuer Adviser to lead managers Financing and bond issue ?6.5 billion ($8 billion) Autostrade Goldman Sachs International and Mediobanca Studio Vitali, Piccardi, Romagnoli e Associati Gianni, Origoni, Grippo and Partners, Rome, Massimo Agostini, Claudia Gregori IPO ?515 million ($626 million) Schlumberger reorganized its chip business with the IPO of Axalto ABN AMRO Rothschild, BNP Paribas, Citigroup and HSBC Linklaters, Paris, Annick Laine-Audouard, Laurent Dabernat; New York, Stephen Land, Friedemann Thomma Cleary Gottlieb Steen & Hamilton, London, David Saltzman, Jonathan Hay; Paris, Alexis Marion IPO $2.5 billion Genworth Financial Goldman Sachs Weil, Gotshal & Manges, New York, Kenneth Heitner, Mark Hoenig Davis Polk & Wardwell, New York, Harry Ballan, Po Sit

US multinationals and their tax advisers strongly support the overhaul of international tax rules contained in bills which the US Senate and House of Representatives passed in recent weeks. However, differences still remain between both bills, which repeal foreign-sales-corporation/extraterritorial-income (ETI) legislation and offer new tax breaks.

The US and China have ended their four-month dispute at the WTO over what the US alleged was China's illegal support, through its tax system, of its indigenous semiconductor makers and designers.

The government of Poland joined France and Germany on July 12 2004 in calling for the harmonization of EU member states' corporate tax regimes. Andrzej Raczko, the Polish finance minister met with his French and German counterparts in Warsaw to discuss the harmonization issue and described the Franco-German initiative as essential for conducting business effectively throughout the EU.

The US energy company ConocoPhillips is facing a law suit in a US district court from Oceanic Exploration Co and its subsidiary, Petrotimor Companhia de Petroleos over claims that ConocoPhillips committed tax fraud and other crimes in gaining its Timor Sea oil fields in south-east Asia. Oceanic is seeking $10.5 billion in damages.

Two months after announcing plans to address certain "inappropriate foreign tax credit transactions," (see International Tax Review, US Outbound Update, April 2004, p97), the US Treasury Department and the Internal Revenue Service (IRS) issued long-anticipated temporary and proposed regulations governing partnership allocations of creditable foreign taxes under Internal Revenue Code section 704(b). Under these regulations, an allocation of creditable foreign taxes cannot have substantial economic effect and as such the taxes must be allocated in accordance with the partners' interests in the partnership.

The US Internal Revenue Service (IRS) issued updated procedures on July 1 2004 that taxpayers can use to request advance pricing agreements (APAs). The procedures were designed to simplify the process of arranging APAs and to encourage bilateral and multilateral APAs to avoid double taxation.

The Supreme Court of India has held that business income and capital gains earned by an Indian resident from immovable property in Malaysia cannot be taxed in India under the India-Malaysia tax treaty.

Gary Richards of Berwin Leighton Paisner explores the ramifications of the UK's new transfer pricing regime, particularly for foreign groups