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Transfer pricing changes under new Japan treaty

On November 6 2003, the United States and Japan signed a new income tax treaty and a protocol to the new treaty, and exchanged diplomatic notes concerning the interpretation of certain provisions of the treaty and protocol. The US Senate and the Japanese Diet should take up the treaty early in 2004, and ratification appears highly likely. If ratified, the new treaty will replace the existing treaty, which was entered into in1971.

December 01 2003

Chancellor rejects tax harmonization

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.

December 01 2003

Taxpayers encouraged to donate not destroy

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October 17 2003 in the Official Gazette for Mexico contained new regulations to the Mexican Income Tax Law (MITL) which repealed and replaced the regulations previously published in 1984.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.

December 01 2003

Losses to survive indirect ownership change

In late October 2003, Germany's highest tax court (the Bundesfinanzhof or Federal Tax Court) released a judgment holding that corporate net operating losses (NOL) continue to be deductible following indirect changes in the ownership of the loss corporation (judgment of August 20 2003 - IR 61/03). For prior discussion of the case and related NOL disallowance issues, see the article by Prinz zu Hohenlohe and Gruendig in International Tax Review (May 2003, page 25).

December 01 2003

New Bill removes time limits for carrying forward losses

The draft Finance Bill for 2004 provides for the carry forward of tax losses without any time limit. Accordingly, the distinction between ordinary losses, which can be carried forward for five years, and deemed deferred depreciation allowances, which can be carried forward with no time limit, will most likely no longer exist.

December 01 2003

New foreign investment entity rules

The fourth draft of the foreign investment entity legislation (FIE legislation) was released by the Canadian Department of Finance on October 30 2003 and generally adheres to the structure of earlier drafts. Certain major changes, and a host of technical revisions, have been adopted. The FIE legislation is to be effective for taxation years beginning after 2002.

December 01 2003

European Commission surveys future EU members

In November 2003 the European Commission issued its latest comprehensive monitoring report on the state of preparedness for EU membership. Most acceding countries should have no particular difficulty in meeting the taxation requirements upon accession on May 1 2004, but the European Commission requires enhanced efforts on the part of Estonia, Malta and Slovenia to meet their obligations as far as direct taxation in general is concerned.

December 01 2003

How to manage transfer pricing risks

Ernst & Young's Philip Anderson and Robert Miall reveal the findings from the firm's global transfer pricing survey revealing which firms are most at risk

December 01 2003

EU-bound Czech Republic releases new incentives

Ton Kemp of Linklaters outlines how taxpayers can take advantage of the new reforms

December 01 2003

OECD recommends cut in New Zealand corporate taxes

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.

December 01 2003

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