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The US state of Michigan will give generous tax breaks to General Motors (GM) and Dr. Schneider Automotive Systems, a German car manufacturer, in a bid to retain and create manufacturing jobs. GM will get a $10.4 million single business tax credit over 20 years if it invests $299 million in its Warren transmission plant for future business while Dr. Schneider Automotive Systems will receive a $3.1 million tax credit over 15 years to build a new manufacturing plant.

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In the May 2002 issue of International Tax Review (page 58), we reported on a decision by the Cologne Tax Court interpreting language contained in article 23(3) of the former tax treaty between Germany and Canada as a subject-to-tax clause and giving this clause precedence over provisions in the treaty by which items of income "shall be taxable only" in Canada. On appeal, the Federal Tax Court (FTC) has now overruled both the lower court decision and its own 1992 holding on point (judgment of December 17 2003, IR 14/02).

On February 27 2004 the minister of finance released Revised Draft Legislation and Explanatory Notes (the new proposals) that contains significant changes to Canada's foreign affiliate regime. The new proposals revise draft legislation that was originally released on December 20 2002 (the 2002 proposals), and introduce a number of new measures (most not dealing with foreign affiliates), including measures to tax payments for non-compete covenants and measures to allow public corporations to return capital without generating a deemed dividend.

Ernst & Young reveal useful corporate tax tips for 2004 from Canada, UK, Japan, Italy and Belgium

Tax reform in Germany has changed thin capitalization rules and the law on exemptions, among other things. More change is on the way, forecast Eckart Nuernberger and Dirk Pelzer of KPMG

The government of Singapore has not ruled out another cut in the country's corporate tax rate, after the reduction from 22% to 20% in the last Budget Lee Hsien Loong, the minister for finance, said in a speech to the parliament on March 10 2004.

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Sed Crest reveals the pressing issues for tax executives, the types of tax services growing quickest and how tax advisers can improve on their delivery

Austria's proposed Budget, scheduled to be effective from January 1 2005, introduces a new group tax regime that would simplify the pooling of profits and losses within a group.