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President George W Bush claimed that his controversial tax-cutting policy is beginning to have a positive effect on the US economy. Critics of the changes say that the tax cuts only benefit the wealthiest individuals and have done nothing to persuade cautious companies to start hiring again.

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 government of South Korea is planning to simplify the tax code and offer more tax breaks to foreign companies in a bid to increase inbound investment. In measures expected to take effect next year, manufacturing firms will receive tax breaks on investments of over $30 million (previously over $50 million).

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

The government of Turkey has released its draft of the Frame Law on State Assistance in Investments, which provides for income and corporate tax exemptions for up to 10 years. The Bill targets foreign investment particularly in the textile and iron and steel sectors.

The UK government warned the Cayman Islands, a British dependent territory and one of the world's largest offshore centres, that it could face regulatory changes to comply with EU savings tax rules. The proposed changes relate to exchanging information between tax authorities as a way of increasing revenue and tackling avoidance and fraud.

In March 2003, the previous financial secretary, Antony Leung, proposed in his Budget speech an increase in the assessable profits deemed rate on royalties received by a non-resident under section 21A of the Inland Revenue Ordinance (IRO) from 10% to 30%. The proposed amendment to the IRO was enacted in mid-July. At the same time the Commissioner of Inland Revenue (CIR) issued a revised Inland Revenue Departmental Interpretation and Practice Note 22 (DIPN 22) explaining the effects of the amendment.

The Indian government has decided to establish a national tax tribunal to hear tax dispute cases. But professional bodies have criticized the tribunal, which will replace the system where tax disputes are heard in the High Court and the Court of Appeal.