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David Benson and Michael Mundaca of Ernst & Young deliver an update on President Bush's tax-cut package and outline the implications of the new US-Japan tax treaty

The Organization for Economic Cooperation and Development (OECD) is threatening to place Switzerland on a tax blacklist because of what it has called harmful tax practices. Switzerland has also been under intense pressure over the issue of information-sharing and keeping banking clients confidential. For many years EU countries such as the UK have been lobbying for more transparency in Switzerland's banking system.

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Ivo Onkelinx: BCCS need to ask for a renewal of their recognition periods The European Court of Justice (ECJ) suspended a European Commission decision forbidding renewals of Belgium's tax-efficient coordination centres (BCCs). The BCC system allows companies to set up in Belgium and benefit from a zero corporate tax rate in certain instances. The system has attracted a large amount of foreign investment since its introduction in 1982.

The Italian government on June 19 approved a Decree extending until 2005 tax breaks for banking foundations that earn capital gains on sales of shares and other assets. The deadline had been 15 June for Italy's banking foundations to give up their controlling stakes in banks or else lose their tax benefits. The move was engineered to reduce the influence of foundations in the banking sector.

Since the announcement of the introduction of the 12.5% corporate tax rate in Ireland, certain tax practitioners, industry and other bodies have been calling for greater clarity concerning the meaning of trading for tax purposes. This is important because only trading income qualifies for the 12.5% tax rate. Non-trading income is liable to corporate tax at 25%. This has culminated in the recent publication of a guidance note by the Irish revenue commissioners (the Revenue) entitled Guidance on Revenue Opinions on Classification of Activities as Trading (the Revenue Guidance). A copy of the Revenue Guidance can be found on the Revenue website at www.revenue.ie.

On May 13 2003 the Australian government announced its response to the Review of International Tax Arrangements conducted by the Board of Taxation (BOT). The response includes a package of reforms designed to reduce the costs of compliance with the controlled foreign company (CFC) and foreign investment fund (FIF) rules, reducing tax on foreign active business income and a programme of modernizing Australia's tax treaties.

EU finance ministers agreed on June 2 2003 a tax package aimed at securing tax revenues and freeing up intra-group payments within the EU. The tax package includes:

On May 30 2003 Law 10,684 introducing modifications to the tax instalment programme for Brazilian taxpayers was enacted. The general rules set forth in Law 10,684 can be summarized as follows.

Philippe Hinnekens of Allen & Overy uncovers the detail behind the challenge to hybrid entities in cross-border tax planning