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Section 245 of the Income Tax Act (the Tax Act), enacted in 1988, contains a general anti-avoidance rule (the GAAR) that incorporates a modified business purpose test into Canadian tax legislation. The GAAR will apply if: (1) the taxpayer derives a tax benefit from a transaction or series of transactions, (2) the primary purpose of the transaction or series is to obtain the tax benefit, and (3) the tax benefit results in a misuse of the provisions of the Tax Act or an abuse of the Tax Act having regard to the provisions of the Tax Act read as a whole.

The Australian parliament has approved changes to the country's controlled foreign corporation (CFC) regime as part of a comprehensive review of the tax system. Regulations published on June 18 2004 will eliminate attribution for most of the income of CFCs (and foreign branches) resident in countries that are taxed comparably to Australia.

After introducing transfer pricing documentation requirements in 2003, the Hungarian government is drafting legislation to introduce advance-pricing agreements (APAs) by 2005

US taxpayers recently scored an important victory in Dover Corp v. Commissioner, which has monumental ramifications in the US tax treatment for disposing of non-US operations

The Hong Kong Legislative Council last week passed long-delayed Inland Revenue tax laws designed to crack down on anti-avoidance

The Italian tax authorities have issued guidelines on the new dividend tax regime that came into force on January 1 2004

Peter Costello described his ninth - and perhaps final - Budget as designed to keep Australia's economy strong

Half the companies which participated in a recent survey on tax risk management said their board directors have not discussed or agreed a policy on the issue

Charlie McCreevy, the Irish finance minister, has identified the country's tax policy as the key to its economic success in recent years. In a speech on June 24 2004 McCreevy reiterated the government's opposition to French and German calls for greater EU tax harmonization, saying that Ireland remains committed to maintaining its tax sovereignty and its low corporate tax rates.

The French tax authorities use the abuse-of-law theory as an obstacle to oppose tax avoidance schemes when the latter are deemed excessive