Search results for

EU commissioner Frits Bolkestein has expressed his dissatisfaction with Switzerland's continued resistance to the EU savings tax package. Switzerland proposed a retention tax on savings of EU residents, but the EU has rejected this as inadequate because it wants the country to agree to exchange of information provisions. Bolkestein stressed that though applying sanctions of some sort was a possibility, it was too early to speculate. He is due to report on the negotiations on October 8 this year.

The Institute of Directors is urging the UK government to change its tax policy. Its survey of UK business leaders indicates that business is concerned about the government's fiscal policy.

Singapore and Russia have signed an agreement for avoiding double tax and income tax evasion. The signing took place in Moscow and was announced on September 9. The agreement intends to ease the cross-border flow of trade, investment, financial activities and technical know-how between Singapore and the Russian Federation, as well as alleviating double taxation. There are also provisions for reducing or exempting tax on certain types of income.

From September this year, Haarmann Hemmelrath has been able to offer its Frankfurt clients dedicated customs advice. The German firm has hired Michael Hundebeck as an associated partner from Schürmann & Glashoff Steuerberatungsgesellschaft.

A reform of Spain's personal income tax (together with certain aspects of non-resident income tax and corporate income tax) is now underway.

The United Arab Emirates Offsets Group, the majority owner of the $3.5 billion Dolphin Energy Project, is selling 24.5% of the venture to Occidental Petroleum. The project includes the construction of a 260-mile natural gas pipeline from Qatar's offshore North Field to the UAE. Occidental Petroleum has replaced Enron as the third partner in the venture, alongside the UAE Offsets Group and the French company Total Fina Elf. Shearman & Sterling provided tax advice, with Alfred Groff and Carol Ann Johnson in Washington representing UAE group.

Multinational groups that operate in a large number of taxing jurisdictions face challenges in demonstrating compliance with the arm's-length standard. Among the growing number of countries that demand contemporaneous documentation, there is very little commonality in requirements. This makes it difficult to achieve economies of scale in the preparation of documentation.

TransCanada

Under draft legislation published recently, the UK intends to restrict the interest deduction that can be claimed by a UK branch through the imposition of an arm's-length debt-to-equity ratio on the branch. At present there is often little restriction in practice on the deduction that UK branches of overseas companies, particularly banks, can claim in the UK in respect of borrowing costs. In comparison, the interest deductions of a UK subsidiary of a foreign parent are effectively limited by the existence of its equity capital (restricting its level of debt). This has resulted in a disparity between the tax treatment of UK branches and UK subsidiaries, which favours (in this respect) branches. The government has decided to take action, because the current position is out of line with other major industrialized countries (in particular, France, Germany and the US).

The European Commission has formally closed its investigation into Spain's Vizcaya coordination centre regime after the Spanish government abolished the regime on April 30 2002. The Commission initiated a state aid investigation into the Spanish regime (as well as a number of other regimes in EU member states) in July 2001, and concluded that the regime constituted unlawful aid in August 2002. Under EU rules, incompatible aid may be subject to recovery from the aid recipient if the Commission was not notified of the aid.