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The American Bar Association (ABA) has said that the IRS must aggressively promote tax simplification to improve service to taxpayers and ensure that tax laws are effectively enforced

Debate is growing in India on the attribution of profits to business process outsourcing entities (BPOs) that are permanent establishments (PE) of foreign companies in India. Under Indian tax treaties, a non-resident has a PE if it carries on business through a dependent agent in India. A dependent agent is an entity in India that exercises authority to conclude contracts or secures orders on behalf of the non-resident and is legally or economically dependent on the non-resident. Treaties say profits attributable to a PE are taxable in India. There are conflicting views on the extent of the profits attributable to the PE.

On January 1 2004 various reforms to the Mexican tax legislation were effective. The most significant changes approved by Congress were made to the Federal Fiscal Code (FFC), which was substantially modified. Almost all of the proposed substantive modifications to specific taxes were rejected so such taxes will remain in essence unchanged for 2004.

The Ministry of Finance announced the tax reform plan for 2004 on December 19 2003. The emphasis is on taxing individuals. Corporation tax has not been drastically changed but notable changes are as follows.

More than a dozen Bills aiming to reform Germany's labour market, public health insurance system, and tax laws were enacted in December 2003.

On October 31 2003 the Brazilian government issued Provisional Measure 135/2003, which, among other things, altered the rules for the application of the social security financing (COFINS) tax. It also introduced new provisions with respect to capital gains realized on the sale of Brazilian assets (including the shares of Brazilian companies) between Brazilian non-residents.

The tax treatment of interest payments between related corporate parties and thin capitalization is set to change. Nikolaj Bjørnholm and Steen Halmind of Bech-Bruun Dragsted explain what’s in the proposed legislation

Mark Kingstone and Katie Price of Linklaters explain the precautions taxpayers need to take over privilege after the Three Rivers judgment

The government of Korea unveiled plans to use tax incentives to encourage project finance activity on January 14 2004. The Korean Ministry of Finance announced the benefits after the National Assembly passed a revision Bill on the nation's Corporate Income Tax Law (CITL).

The government of the Kingdom of Saudi Arabia has approved a new income tax bill which cuts the corporate tax rate on foreign investors from 30% to 20%. The move is designed to generate badly-need investment into the country and follows a similar rate cut from 45% to 30% at the beginning of 2000.