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The Venezuelan government has decided to extend its tax on financial transactions by another year to help repair the country's damaged economy. A two-month strike, which began at the end of last year, virtually brought the country to a standstill with the oil industry, businesses and the stock exchange shutting their doors. The transaction tax will gradually fall from 1% to 0.5%.

The US Senate Foreign Relations Committee has approved the new US-UK double tax treaty. When adopted, the treaty will abolish the 5% US withholding tax on dividends. The treaty was signed in July 2001 and was ratified by the UK in November last year.

A European Court of Justice (ECJ) Advocate General opinion on a personal tax case could lead to similar cases being brought by businesses. The case related to the French residential exit tax due by Hughes de Lasteyrie du Saillant, transferring his tax residence from France to Belgium. The ECJ Advocate General ruled that the French exit tax is against the EC freedom-of-establishment principle in the EC Treaty.

Glenn Hubbard has resigned from his role as chairman of the White House Council of Economic Advisers. Hubbard, who played a key role in President Bush's tax-cutting programme, is expected to return to Columbia University where, until joining Bush's government in 2001, he was a professor of economics. Bush intends to nominate Nicholas Gregory Mankiw, an economics professor at Harvard University, to replace him.

Gustavo Haddad: wants to strengthen tax group The Brazilian law firm Goulart Penteado, Iervolino e Lefosse Advogados, which is associated with Linklaters, has lured a tax partner from KPMG. Gustavo Haddad, who joined KPMG in 1994 started working at Goulart Penteado in São Paulo on March 17 2003 and will lead the firm's tax group. He joined with fellow KPMG lawyer Bruno Carramaschi.

Toronto

The budgetary measures for 2003 include new rules on the place of supply of services for value-added tax (VAT) purposes.

A new notice issued by the Ministry of Finance and the State Administration of Taxation exempts enterprises from business tax on the disposal of equity or shares which were initially invested in the form of buildings, land use rights, technology or other intangible assets. Prior to the issue of these rules, intangible assets or real property transferred to a company as capital contribution were exempt from business tax until the investor disposed of the equity or shares, which then subjected the disposition to a 5% business tax. However, there was a lack of guidance on how the 5% would be calculated and this new notice clarifies this issue. The notice takes effect from January 1 2003.

Elimination of capital tax

Energy companies initially embraced President Bush's proposal to eliminate taxes on dividends, but some pulled back after reading the fine print. Keith Martin of Chadbourne & Parke explains why