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Though the Minister of Finance's Budget presented in February was described as bland, there was a shock which will affect banks and corporates. That is the announcement of the intention to re-categorize certain financing instruments in accordance with their "economic substance". As has been done in other countries, rules will be written into the Income Tax Act to re-categorize these instruments for tax purposes. Typical examples that might include re-categorizing:

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.

Colombia's new transfer pricing rules set out clearly what is expected of taxpayers, according to Ricardo Rosero, Bernardo Solano, and Fabián Alfonso of BaseFirma

Capital Acquisitions Tax (CAT) is a tax imposed on gifts and inheritances (benefits), which exceed certain tax free thresholds. The recipients of benefits are primarily accountable for the tax. An exemption applies to benefits passing between spouses; all other benefits are taxed at 20%.

The Interest and Royalty Directive of June 3 2003 was amended at the end of April 2004 in the context of the EU accession of 10 new member states. The amendment was necessary because the directive, which provides for abolition of withholding tax on intra Community interest and royalty payments between associated companies, had not yet been adopted when the Accession Treaty was signed in Athens on April 16 2003.

Baker's dozen: the 12 new partners Jesus Alvarado focuses his practice in tax planning and tax consolidation in high tech, telecommunications and entertainment.

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.

In February 2004, the German tax authorities issued a directive addressing the landmark transfer pricing decision rendered by the Federal Tax Court (FTC) on October 17 2001 (see International Tax Review, February 2002, p22). The case involved a German marketing subsidiary of a foreign group; the new directive is limited to this situation. The directive instructs tax officials to disregard key aspects of the October 2001 decision in their future administration of the tax laws.

One of the most basic responsibilities of boards is to balance risk and return so that shareholder value grows and is protected. How then should directors respond to the Taxman elevating tax risk management to the agenda of Australia's top 1500 boards?

During the last decade, large Argentine companies were able to obtain access to medium- and long-term financing at attractive rates through the issuance of corporate securities (Obligaciones Negociables, ONs).