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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

In the June 2003 issue of International Tax Review, as part of the European survey of leading tax advisers, on page 19, PricewaterhouseCoopers, overall winners in the Swiss table of results, appeared as "Landwell (PricewaterhouseCoopers)" and "Landwell" whereas the they should have been listed as "PricewaterhouseCoopers". We apologise for this error.

Low Hwee Chua and Wong Chee Ming of Deloitte & Touche scrutinize the foreign-source income exemption guidance released by the Singapore tax authorities

David Evans, Robert Hodges and Ben Kiekebeld of Ernst & Young analyze the case and what it means for cross-border loss relief across Europe

On June 10 2003 the governments of the US and Japan agreed on a Treaty to eliminate taxes on some transactions between the two countries. The Treaty ends withholding taxes imposed on certain dividends, interest payments and royalties. The agreement will replace the existing Treaty, which has been in place for nearly 30 years and subjects companies to double international taxation. The two governments expect to sign the treaty in July 2003 prior to formal ratification.