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Vladimir Putin, Russian President, has targeted the oil industry to pay for sweeping tax reforms that would cut social tax paid by Russian companies. He has said once the tax system is reformed, it must not undergo changes for a long time.

The Chinese State Administration of Taxation has announced a tax amnesty that will allow foreign residents who are taxable in China to pay their overdue or underreported tax liabilities without penalties. The amnesty allows foreign residents or their withholding agents to remit overdue tax payments on or before June 30 2004, without penalties.

The Japanese parliament has approved the tax treaty signed with the US on November 6 2003. The treaty would eliminate source-country withholding taxes on all royalty income, dividends paid to parent companies owning a majority stake in the paying entity, and some interest income. Japan and the US are expected to exchange instruments of ratification on March 30 2004 in Tokyo, at which point the treaty will enter into force.

During the second week of February, the Ministry of Finance issued new miscellaneous regulations that both clarify and broaden tax incentives that had previously been decreed

The European Commission announced on March 16 2004 an investigation of the tax incentives offered by the Italian government to newly-listed companies. Upon meeting certain conditions, companies that list their shares on a regulated EU stock exchange qualify as of January 1 2004 to a reduced 20 % corporate income tax rate (instead of the ordinary 33%) for the fiscal year in which the listing occurs, and the following two fiscal years.

The Mexican government published the tax treaty with Australia and its protocol on February 13 2004. The treaty, signed on September 9 2002, became effective with respect to withholding taxes on dividends, interest and royalties for amounts paid or accredited on or after January 1 2004. The treaty's remaining provisions will be effective from July 1 2004.

Standard & Poor's tax flexibility ratings released on March 9 2004, show that South Korea, followed by Australia, Switzerland and Japan, has the most flexible tax system. The ratings firm assesses tax flexibility as part of its sovereign bond assessment, giving high tax-flexibility ratings for low tax rates, many exemptions and relatively lax tax administration. In times of economic difficulty, such tax systems have greater scope to increase taxes and improve their administration. According to the study, the most tax-inflexible countries were Sweden, Denmark, Belgium, Finland and Germany.

On March 8 2004 the US Senate Committee on Finance considered the nomination of Donald Korb, President Bush's nominee for the position of IRS Chief Counsel. Korb, now a partner with Thompson Hine in Cleveland, was assistant to Commissioner Roscoe Egger in the mid-1980s when the IRS spearheaded an attack on tax shelters. Korb vowed to continue the struggle against tax shelters during his testimony. Korb's nomination will still require confirmation from the Senate.

Tom DeLay, US House of Representatives' majority leader, announced on March 9 2004 that he expects the House to consider the Thomas Bill that will repeal the FSC Repeal and Extraterritorial Income Exclusion Act of 2000 (ETI Act) before April 5 2004. Senator Grassley's Bill, which is competing with the House Bill to replace the ETI Act, became mired in numerous amendments in the Senate last week but debate will resume on March 22 2004.

Tax avoidance schemes have risen to the top of the hit list of Gordon Brown, UK chancellor of the exchequer, just days before he reveals the annual Budget on March 17 2004