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Italian update: New group company rules bring up permanent establishment issues

Legislative Decree 6 of January 17 2003, reforming Italian company law, with effect from January 1 2004, introduced in the Italian Civil Code (the ICC) specific rules related to groups

March 14 2004

Austria to cut corporate tax to 25%

The Ministry of Finance has released a draft tax reform package that will reduce the tax burden by €3 billion ($3.7 billion). The package, if passed, which will likely take effect from January 1 2005, cuts corporate income tax from 34% to 25%, revamps treatment of group losses, makes interest incurred for the participation acquisitions deductible but removes capital gains neutrality for new assets in some cases.

March 14 2004

Netherlands signs tax protocol with the US

On March 8 2004 the US and the Netherlands signed a protocol to the 1992 tax treaty that, in some circumstances, eliminates withholding taxes on dividends paid to parents within the two countries. The protocol also updates the limitation of benefits arrangements and includes new rules on partnership investments.

March 14 2004

US Senate ratifies Japan treaty

The US Senate ratified the tax treaty with Japan on March 9 2004. The Japanese Diet needs to ratify the agreement by April 1 2004, to allow provisions on reduced withholding tax on dividends, interest and royalties to take effect from July 1 2004 rather than next year.

March 14 2004

ATO claims Toyota owes up to $700 million in unpaid tax

Toyota Australia is facing a claim by the Australian Taxation Office (ATO) that it shifted profits offshore, avoiding about $300 million to $700 million in taxes between 1994 and 1999. Toyota's spokesperson, quoted by the Australian Broadcasting Corporation, has rejected the claim and says it is working with the ATO to finalize the review.

March 14 2004

Bank transactions tax hurts business in Peru

Just 11 days after it came into effect, the 0.15% tax on banking transactions in Peru is having a marked negative effect on business in the country according to the Lima Chamber of Commerce. On March 4 2004 the chamber claimed that Peru's average foreign exchange volume has dropped by 43% since the introduction of the tax. Many companies complain they are forced to pay the tax over and over again through their supply chain.

March 14 2004

Lasteyrie

Freedom of establishment; Article 52 of the EC Treaty (now, after amendment, Article 43 EC); Tax legislation; Transfer of residence for tax purposes to another Member State; Methods of taxing increased value of securities; exit taxes; tax captures the gain accrued in the former residence state up to the point of emigration;

March 11 2004

Finanzamt Rendsburg v Detlev Harbs

Sixth VAT Directive – Article 25 – Common flat-rate scheme for farmers – Leasing out by a farmer of some of the assets of his farm – Application of the general scheme to the income from the leasing arrangement.

March 11 2004

IRS increases interest rates for 2004

The US Inland Revenue Service (IRS) announced on March 1 2004 that interest rates will rise by one percentage point on April 1 2004. Interest will be set at 5% for overpayments (4% for corporations), 5% for underpayments (7% for large corporate underpayments) and 2.5% for the portion of a corporate overpayment exceeding $10,000.

March 07 2004

New tax counsel for Australian accounting body

On 3 March 2004, the Institute of Chartered Accountants in Australia (ICAA) announced the appointment of Ali Noroozi to the role of Tax Counsel. Noroozi has over 10 years experience in Australian and international taxation from positions at Deloitte Touche Tohmatsu and Ernst & Young and within law practices including Minter Ellison and Linklaters.

March 07 2004

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