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Companies which have overpaid UK tax due to a generally held but mistaken view of the effect of UK tax law may be prevented from seeking compensation for the full amount of their loss. This is the effect of draft legislation published on September 8 2003. Claims brought before September 8 are not affected by this change. This move is particularly topical for multinational groups considering seeking compensation for UK tax law breaching EU law.

In a decision dated June 20 2003 (Conseil d'Etat, n 224407, Sté interhome AG), the French Administrative Supreme Court had to interpret the permanent establishment concept in the light of the tax treaty signed between France and Switzerland.

Following the March 2003 issuance of the Provisional Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, the State Administration of Taxation (SAT) issued a circular clarifying the tax treatment of such acquisitions. In particular, the circular confirms that if a foreign investor's equity in the new enterprise exceeds 25%, the new enterprise will be treated as a foreign invested enterprise (FIE) for tax purposes and therefore will be eligible for the preferential tax treatments granted to FIEs. Further, the circular clarifies the following points:

After years of debate, several tranches of legislation and many delays, the implementation of Australia's new tax consolidation regime is upon us. However, many businesses are entering the new system in a state of tax reform fatigue - with many organizations finding that the implementation is taking longer and involving more resources than expected.

Louise Higginbottom of Norton Rose summarizes proposals for the reform of corporation tax and considers what it will mean

José María Cusí and Roberto Grau of Clifford Chance explain how to benefit from the issue of preferred shares and debt instruments under the new Spanish regime

Martin Bünning of Allen & Overy looks at the elements of the tax package that are relevant for international business transactions and are the most likely to be adopted

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

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.

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.