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UK government proposals to reform the corporate tax system could be damaging for domestic businesses. The government plans to introduce a costly domestic transfer pricing system and impose tax changes to finance leasing. Companies have until November 3 2003 to respond to the Corporation Tax Reform Consultation published on August 12 2003.

The Italian tax authorities (ITA) have revoked, with ruling 159/E of July 25 2003 (the New Ruling), their previous ruling dated December 13 2000 (the Previous Ruling). The Previous Ruling addressed a transaction (the Share Exchange) whereby an Italian company (the Contributing Company) transferred to a beneficiary company resident of a different EU Country (the Beneficiary Company), the controlling stock of another company (the Controlling Stock), solely in exchange for the Beneficiary Company's shares (the Shares).

A circular issued in April 2003 clarifying the implementation of China's new tax-collection law clarifies the situations in which the statute of limitation on transfer pricing adjustments can be extended to ten years from the normal three years. These include instances where:

On July 9 2003 the Brazilian Congress approved a Bill, originally from 1989, relating to the application of the municipal services tax (ISS). The Bill brought important changes to the existing legislation and expanded the original list of services subject to the tax. The newly-added services are mainly relating to IT and banking services. The new project is expected to increase the total of ISS collected by municipalities from R$8 billion ($2.7 billion) to R$15 billion ($5 billion) within the next three years.

Irma Johanna Mosquera Valderrama explains what the reforms will mean for companies operating in the country

Urs Landolf was nominated head of PricewaterhouseCoopers' tax and legal practice on July 1 2003. Landolf is now a member of the firm's European management board. Andrin Waldburger will replace him as head of tax and legal in Switzerland.

The European Commission has released a 338-page draft consultation paper, a recast of the Sixth VAT Directive. The European Commission has asked interested parties to submit comments on the paper by 26 September.

According to the transitory provisions of the Income Tax Law in effect in 2003, the executive branch should issue new regulations to the legislation no later than July 31 2003. To date, the final version of the new regulations has not been released but there is a draft that includes some new points applicable to parties resident abroad.

The Spanish parliament is currently debating a new law on undertaking for collective investment in transferable securities (UCITS), which contains the following tax measures.

The Sarbanes Oxley Act introduced in August last year in the US, has forced a number of tax specialists to leave the large accounting firms. New firms specializing in different areas of tax, particularly tax valuations and transfer pricing, are competing in an increasingly fluid market place in Europe and the US.