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The Brazilian tax authorities have for the past few months issued a number of rulings designed to preserve and/or modify the related tax base. Some recent rulings worth mentioning are the following:

Russia has revised the list of taxes applicable in the country. On July 7 2004 the Duma passed in the third and final reading a draft law introducing modifications to Parts I and II of the Tax Code. The law is scheduled to enter into force on January 1 2005.

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.

New legislation aims to encourage private equity and venture capital investment via Luxembourg. Dean Rolfe of PricewaterhouseCoopers discusses the role tax plays in the new vehicle

Tax officials in China have been stepping up efforts to combat tax evasion by foreign-invested companies that is estimated to cost the country Rmb30 billion ($3.62 billion) in lost revenue every year. Investigations and transfer pricing audits will this year focus on foreign-invested firms that are expanding their presence in China while continuing to register losses.

The European Court of Justice (ECJ) has ruled against Belgium imposing capital gains tax on the sale of a substantial participation in a Belgian company to a foreign entity. In a preliminary ruling the ECJ found the tax to be incompatible with the EC Treaty.

The European Court of Justice has annulled the EU finance ministers' November 2003 decision not to enforce the Stability and Growth Pact's excessive deficit rules against France and Germany, finding in favor of the European Commission. The case involved the European Commission versus the Council of the European Union and was concluded on July 13 2004.

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:

By Jeffrey Owens, director, Centre for Tax Policy and Administration, OECD