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Non-US companies investing in the US through multiple chains of ownership should be aware of certain potential US tax benefits in cases where they have a financially troubled US subsidiary. Sometimes difficulties arise inasmuch as the loss occurs in a less profitable chain of subsidiaries and cannot be used to offset income of a more profitable chain of subsidiaries.

James P Fuller of Fenwick & West explains how the US Internal Revenue Service's proposed new transfer pricing methods for services transactions would work

Attracting more than 200 tax professionals, representing more than 50 multinationals and with delegates coming from 22 different countries, the Transfer Pricing Forum 2003 ran for two days from September 22 and 23 in the heart of New York at Essex House on Central Park. The third time that International Tax Review has hosted the event in association with KPMG, the highlights from this year's forum included a candid address from Hal Hicks, Associate Chief Counsel (International) at the US Internal Revenue Service, analysis of the new services regulations and sessions on transfer pricing strategies in practice and the commercial implications of transfer pricing.

The US Treasury and the Internal Revenue Service issued final regulations on the tax treatment of stock-based compensation under the related-party transfer pricing rules governing qualified cost-sharing arrangements on August 25 2003.

By Marc M Levey, Baker & McKenzie in New York

Margie Rollinson, Michael Mundaca, David Benson and Howard Berger of Ernst & Young reveal how Washington plans to replace the Extra Territorial Income Act

Alan Tsoi & David Kuo of Deloitte Touche Tohmatsu analyze the new representative office rules and the implications for multinationals investing in the country

Type of deal Value Acquirer Target Adviser to acquirer (tax) Adviser to target (tax) M&A $2.2 billion Ripplewood Group Vodafone sold Japan Telecom Simpson Thacher & Bartlett; Nagashima Ohno & Tsunematsu Vodafone advised by Linklaters and Anderson Mori M&A ?400 million ($450 million) The Carlyle Group and Eurazeo Terreal White & Case Shearman & Sterling M&A £1.1 billion ($1.7 billion) Lloyds TSB Centrica agreed to sell the Goldfish credit card business Tite & Lewis, London, Jim Hillan Centrica represented by Linklaters, London, Mark Kingstone, Liz Conway, Rayna Taback M&A ?670 million ($769 million) Vestar Capital Partners Doughty Hanson & Co has agreed to sell FL Selenia Kirkland & Ellis, New York, Greer Phillips, Kevin Treesh PricewaterhouseCoopers, New York, Mike Hawley M&A $2.3 billion Axa, through its Axa Financial unit has agreed to acquire MONY Group MONY Group Debevoise & Plimpton, New York, David Mason, Seth Rosen Dewey Ballantine M&A $260 million TBC Corporation Sears, Roebuck and Co has agreed to sell National Tire & Battery Thompson Hine, Dayton (Ohio), Francesco Ferrante Mayer, Brown, Rowe & Maw, Chicago, John Huff M&A $116 million Church & Dwight Co Unilever has agreed to sell its oral care brands in the US and Canada Morgan Lewis & Bockius, New York, Richard Zarin Cravath, Swaine & Moore, New York, Michael Schler M&A $4.35 billion An investor group comprising The Blackstone Group, Appollo Management and Goldman Sachs Capital Partners Suez SA has agreed the sale of its Ondeo Nalco water treatment services business Davis Polk & Wardwell, New York, Michael Mollerus The Blackstone Group was advised by Simpson Thacher & Bartlett, New York, Gary Mandel; Apollo Management and Goldman Sachs Capital Partners were advised by Wachtel, Lipton, Rosen & Katz, New York, Deborah Paul Type of deal Value Issuer Lead managers Adviser to issuer Adviser to lead managers Real estate financing ?1.56 billion ($1.75 billion) Uni-Invest HVB Real Estate Investment Banking Gibson Dunn & Crutcher; Stibbe Allen & Overy, Amsterdam, Olaf van der Donk, Olaf Kroon Notes issue £1.2 billion ($1.9 billion) Aviva Lehman Brothers Slaughter and May, London, Graham Airs, Martin Walker, Hilary Barclay Linklaters Securitization $1 billion Barclays Bank Barclays Capital Clifford Chance, London, Etienne Wong Weil, Gotshal & Manges Tap issue £132.5 million ($220 million) Spirit Group tapped its Spirit Funding issue by £132.5 million Goldman Sachs Slaughter & May, London, Graham Airs, Orla Cole Freshfields Bruckhaus Deringer Rights issues to existing shareholders £960 million ($1.5 billion) Royal & Sun Alliance Insurance Group Goldman Sachs International, Merrill Lynch International and Cazenove & Co Ashurst Morris Crisp Linklaters

One year on and the Sarbanes Oxley Act in the US continues to have repercussions throughout the tax services market.

The Spanish Supreme Court judgment of June 7 2003 has confirmed the right of the Spanish tax authorities to require firms of auditors to disclose documents that may be relevant to determining the tax obligations of their clients. The decision seems to put an end to the debate on whether the obligation to cooperate with the tax authorities prevails over an auditor's duty of confidentiality, and confirms the general trend in the Spanish legal system towards reinforcing the transparency and good management of companies.