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New Zealand should implement a broad-based corporate tax cut according to the OECD's annual survey of the country released on December 10 2003. The survey also said the country's tax rates, while on par with OECD averages, may not be attractive enough to stimulate increased foreign direct investment.

UK law firm Masons has joined forces with Economic Laws Practice (ELP), a tax boutique in Bombay. Masons is targeting Indian Public Private Partnership and Private Finance Initiative work and will use ELP to offer tax advice.

On November 7 2003 (Japan time), the Japanese ambassador to the US and the US secretary of the treasury signed a new income tax treaty. If both countries ratify it before December 31 2004, the new treaty would generally have effect as of January 1 2005.

Three months after the landmark signing of the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and China, the two governments have signed six annexes further clarifying the terms of the arrangement. The arrangement covers three broad areas - trade in goods, trade in services, and trade and investment facilitation. For trade in goods, from January 1 2004 the CEPA permits exports of Hong Kong origin from 273 tariff classes to enjoy zero tariffs, as long as they meet CEPA rules-of-origin requirements. Included in the 270 classes are electrical and electronic products, textiles and clothing, jewelry and cosmetics. China has also agreed to apply a zero import tariff upon applications by local manufacturers for other tariff classes maintained in China's tariff system that meet the CEPA rules of origin. It will do this by January 1 2006 at the latest.

Type of deal Value Acquirer Target Adviser to acquirer (tax) Adviser to target M&A $101 million Gardner Denver Syltone Skadden, Arps, Slate, Meagher & Flom, London, Tim Sanders, Linda Davies, Paul van de Grampel Addleshaw Goddard, Leeds, Mathew Gorringe M&A £642 million ($1.93 billion) Hicks, Muse, Tate & Furst proposes to acquire Weetabix Weetabix Weil, Gotshal & Manges, London, Sarah Priestley Ashurst, London, Richard Palmer, Kate Eveleigh M&A ?1.04 billion ($1.24 billion) Blackstone Group Deutsche Bank has agreed to sell 51 office and bank buildings in Europe Simpson Thacher & Bartlett, New York, John Hart; London, Meredith Jones Hengeler Mueller, Frankfurt, Friedhelm Jacob M&A £1.15 billion ($1.98 billion) Powergen Aquila Sterling Holdings agreed to sell Midlands Electricity Freshfields Bruckhaus Deringer, London, Colin Hargreaves Jones Day, London, Keith Featherstone M&A Undisclosed Texas Pacific Group Ripplewood Holdings agreed to sell KRATON Polymers Cleary Gottlieb Stein & Hamilton, New York, Yaron Reich Ripplewood Holdings was advised by Simpson Thacher & Bartlett, New York, Rob Holo, Jonathan Cantor M&A C$500 million ($383 million) RBC Insurance agreed to purchase the Canadian unit of Provident Life and Accident Insurance Company, a subsidiary of UnumProvident Corporation UnumProvident Corporation RBC Insurance was advised by McMillan Binch, Toronto, David Wentzell McCarthy Tétrault, Toronto, James Warnock, Jillian Welch M&A $4.4 billion Koch Industries El du Pont de Nemous and Company agreed to sell Invista Stikeman Elliot, Toronto, Kevin Kelly Skadden, Arps, Slate, Meagher & Flom, New York, David Rievman M&A $2.8 billion RR Donnelley & Sons Moore Wallace Sidley Austin Brown & Wood, Chicago, Robert Ferencz, Sharp Sorensen Sullivan & Cromwell, New York, Willard Taylor; Osler, Hoskin & Harcourt, Toronto, Judith Harris M&A £102.4 million ($176.4 million) Platinum Equity Hays agreed to sell its logistics business Baker & McKenzie, London, Alex Chadwick, James Smith Freshfields Bruckhaus Deringer, London, Francis Sandison, Angela Savin, Laurent Sykes M&A £285 million ($491 million) Arbor, a vehicle specifically formed for the purpose of the acquisition by Collins Stewart MidOcean Partners agreed to sell Center Parcs UK Collins Stewart and Arbor advised by Simmons & Simmons, London, Nick Cronkshaw, Gareth Amdor, Zoe Feller Linklaters, London, Jan Birtwell, Stephen Pevsner, Georgina Nedas M&A £152 million ($265 million) Baugur/Kaupthing Oasis Stores KPMG, Birmingham, Brendan O'Grady, Iain Clarke, Renu Birla BDO, London, Paul Eagland, Charles Pascoe Type of deal Value Issuer Lead managers Adviser to issuer Adviser to lead man Bond issue ?616 million ($734 million) ACCOR BNP Paribas and Société Générale N/A Linklaters, Paris, Annick Lainé-Audouard, Laurent Dabernat Refinancing for two pub securitizations £1.82 billion ($3.12 billion) Punch Taverns Royal Bank of Scotland Slaughter and May Freshfields Bruckhaus Deringer, London, Michael Thompson Bond issue ?1 billion ($1.18 billion) FHB Land Credit and Mortgage Bank Dresdner Kleinwort Wasserstein Allen & Overy, Budapest, Zoltán Lengyel, Ágnes Bodi Berecz & Andrékó Linklaters Rights issue ?4 billion ($4.76 billion) Munich Re Deutsche Bank Allen & Overy, Frankfurt, Asmus Mihm Hengeler Mueller Bond issue $215.8 million Lonmin Cazenove and Morgan Stanley International Allen & Overy, London, Brenda Coleman, Andrew Howard, Jonathan Chapper Linklaters, London, Stephen Taylor Notes issue $500 million Bavaria ABN Amro Simpson Thacher & Bartlett, New York, Audra Lazarus, Rachelle Holmes Cravath, Swaine & Moore Securities issue ?300 million ($363 million) DZ Bank Capital Funding Trust 1, a Delaware Trust and a subsidiary of DZ Bank Deutsche Zentral-Genossenschaftsbank UBS Investment Bank Freshfields Bruckhaus Deringer Linklaters, Frankfurt, Martin Krause; New York, Stephen Land IPO $237 million Aspen Insurance Holdings CSFB and Golman Sachs LeBoeuf, Lamb, Greene & MacRae, New York, Arthur Lynch, Saren Goldner; London, Andrew Terry Simpson Thacher & Bartlett, New York, Gary Mandel, Josh Eisenberg Rights issue ?751 million ($917 million) SCOR BNP Paribas, Goldman Sachs International, HSBC CCF Skadden, Arps, Slate, Meagher & Flom, Paris, Xenia Legendre, Stéphane Héliot Debevoise & Plimpton Bond issue ?150 million ($183 million) Sol Melia Europe Barclays Capital Linklaters, Madrid, Nicolás Martín, Marta Esteban Cuatrecasas

The UK Chartered Institute of Taxation has produced a CD-rom guide for tax advisers setting up new businesses. The guide covers key issues in establishing a tax practice along with advice on marketing, recruitment and best practice through quality controls.

Gordon Brown, Chancellor of the Exchequer, has made it clear in speeches and newspaper articles that the UK will resist proposals to harmonize direct tax regimes across the EU. The UK will also resist any attempt to introduce majority voting on tax issues, insisting on retaining its veto.

The proposed section 482 services regulations change many aspects of the transfer pricing regulations for related-party services and the ownership of intangible property.

The regulations published on October 17 2003 in the Official Gazette for Mexico contained new regulations to the Mexican Income Tax Law (MITL) which repealed and replaced the regulations previously published in 1984. These regulations became effective the day after their publication.

By Manuel F Solano, partner in charge of Ernst & Young’s Latin American Business Center and international tax practices throughout Latin America