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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.

Until 2003 salary income of non-residents was taxed in Spain when:

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.

In the course of 2002 few changes were made to the Brazilian transfer pricing legislation; the main one being the expansion of transactions subject to transfer pricing regulations. Following the enactment of Law 10451 (May 2002), transactions undertaken between unrelated Brazilian individuals or legal entities and foreign individuals or legal entities resident or domiciled in a country in which local legislation allows corporate ownership secrecy are subject to Brazilian transfer pricing regulations.

With its tax rate of 12.5% and a tax system that since 1997 has aimed to make securitization deals effectively tax-neutral, Ireland is already a popular onshore location for securitization. But changes announced in its Finance Bill in February 2003 should make the country even more attractive. The Bill announced changes to simplify and update the securitization rules to take into account a much wider range of transactions. It is due to be enacted by April 4 this year and changes are possible until then but it will be effective from February 6.

Tax obstacles to securitization are to be abolished in Germany but true-sale transactions will require careful structuring. Florian Schultz and Martin Krause of Linklaters Oppenhoff & Rädler explain why

Thanks to a recent decision by Germany's highest tax court, foreign employees temporarily transferred to a German group subsidiary will generally be entitled to receive government child support contributions (Kindergeld) for their children living in Germany if their income is subject to German social insurance contributions (Federal Tax Court judgment of October 30 2002 - VIII R 67/99).

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 region's ever-expanding tax treaty network is providing new tax-strategy opportunities. Nicasio del Castillo, Jorge A Gross, Eduardo Pupo and John A Salerno of PricewaterhouseCoopers show where

A new local enterprise taxation system will be introduced in Japan for tax years after April 1 2004, where a corporation will be taxed based on the size of its businesses measured by the value added, its capital, and its income. Under the new taxation system, a corporation with a tax loss will have to pay local enterprise tax. The new system is briefly summarized as follows.