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Sixth VAT Directive – Article 9(2)(e) – Place of taxable transactions – Fiscal connection – Advertising services.

Sixth VAT Directive – Deduction of input tax – Possibility of opting for taxation of the letting of immoveable property – Abolition – Adjustment of deductions – Applicability to current leases – Protection of legitimate expectations.

The Dutch grocery group Ahold revealed on May 26 that "intentional accounting irregularities" and "misapplications of generally accepted accounting principles" mainly at their Tops Markets US subsidiary, had forced it to reduce predicted pre-tax earnings by $29 million. The company was forced to restate its earnings for 2001 and 2002 and reduce its profits by $500 million earlier this year after irregularities were found in the accounts of its US subsidiary.

Vanuatu has been removed from the OECD's list of uncooperative tax havens after the country committed to improving the transparency of its tax and regulatory systems and to establishing effective exchange of information for tax matters with OECD countries by the end of 2005. The list was published in April 2002 and the Vanuatu is the first to be removed. Six jurisdictions remain on the list.

Foreign investments in Spanish real estate have increased considerably in the past few years, requiring proper tax planning. José Maria Cusí and Carmen Gómez de Cadiñanos of Clifford Chance reveal how to do it tax-efficiently

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Our international tax team comprises over 40 practitioners in seven European jurisdictions. We advise on M&A tax planning, international group structuring, capital markets and banking taxes, employment taxes, real estate taxes, VAT and other indirect taxes, tax investigations and disputes, all as a matter of course. In addition, we have recognised experts in the areas of trusts and private capital tax planning, share incentives and employee benefits and onshore and offshore collective investment schemes.

In a ruling released in April this year, Germany's highest tax court has referred a case to the European Court of Justice (ECJ) that gives this body the opportunity to decide whether EU member states may deny their taxpayers a deduction for losses incurred in another EU member state (German Federal Tax Court ruling of November 13 2002 - IR 13/03).

The World Trade Organization granted the EU permission to apply sanctions worth $4 billion against the US in the ongoing Foreign Sales Corporation case on May 7. The EU wants the US to ensure compliance with the WTO rules before the beginning of next year and will review the US' progress in autumn this year. The most popular bill in the US to deal with the export subsidies is the Crane Rangel Bill which suggests replacing the FSC benefit with tax benefits for companies producing their good in the US rather than overseas.

Otto-Hans Nowak and Grant J Russell of Borden Ladner Gervais analyze how the Canadian government has amended its proposed scheme for non-resident trusts