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Proposals in Japan to allow the use of foreign company shares in stock-for-stock deals with domestic entities will be ineffective because the government will not remove prohibitive tax burdens.

Ernst & Young has successfully struck out a £2.6 billion claim against it by Equitable Life and the judge described Equitable's alternative bonus claim as 'seriously flawed'.

by Edward Troup, Head of Tax Strategy, Simmons & Simmons

Transfer pricing has been one of the most talked about areas of tax work in recent years and so far it has stayed firmly in the hands of the professional services firms. The big four have been able to make full use of their international networks in restructuring multinationals' supply chains and advising on the full range of transfer pricing services. Very few other firms have been able to compete on such a scale.

The Italian tax authorities have confirmed, in circular letter 8/E issued on February 6 2003 (the Ruling), the de facto tax neutrality of vehicles incorporated pursuant to the so-called Securitization Law (law 130 of April 30 1999) in order to carry out securitization transactions (Securitization Vehicles).

A recent notice, effective from January 1 2003, clarifies the approval, registration, foreign exchange and taxation of foreign investment enterprises (FIEs) with less than 25% foreign ownership. The notice unifies the approval, registration and foreign exchange treatment of all FIEs in China by requiring FIEs with less than 25% foreign ownership to obtain MOFTEC approval and abide by the same registration and foreign exchange procedures as other FIEs. However, the notice states that FIEs with less than 25% foreign ownership will not be entitled to the preferential tax policies offered to other FIEs, including the duty-free import of capital equipment.

On December 12 2002 the Court of Appeal delivered its judgment in the case of Mansworth v Jelley ([2003] STC 53). The court held that where an employee exercised unapproved share options granted by their employer or otherwise than by way of bargain at arm's length, the base cost in the shares should be treated as being the market value of the shares at the time of exercise of the option.

During this period of low interest rates, the income fund has been an attractive alternative for investors seeking yield-based investments and has also been an attractive alternative for companies seeking to monetize the value of a business or seeking an exit from it.

Italy’s tax amnesty draws a line between the tax system of old and the new budgetary reforms. Francesco Florenzano and Barbara Faini of Baker & McKenzie explore taxpayers’ options

The OECD Committee on Fiscal Affairs recently issued the January 2003 version of the Model Tax Convention on Income and on Capital (the Model Convention). This version includes the text of the Model Convention as it read on January 28 2003 and has various significant points; one of the most interesting is Mexico's new observation with regard to the commentary on article 12 (royalties) of the Model Convention, which reads as follows: