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The US Internal Revenue Service has been putting forward the market capitalization approach as a tool for calculating buy-in payments for cost-sharing arrangements. Is this the best method? Jacqueline Doonan and Jessica Tien, Deloitte & Touche, San Francisco, have their doubts.

Group loss relief is a key tool used by taxing jurisdictions and companies to offset losses and encourage growth. But if group relief is to be a key method for business expansion, policies need to focus on bringing more subsidiaries under the group relief umbrella. By Abadan Jasmon and Dr Junaid M Shaikh, Multimedia University, Malaysia

Irish law firm A&L Goodbody has set up a value-added tax (VAT) group in Dublin with a former KPMG tax partner. John McGlone joined the firm at the end of August as head of VAT. McGlone worked with KPMG for just under four years until 1998 when he joined GE in Dublin as European VAT manager. He left GE last year and spent 12 months working as an independent tax consultant.

McDermott Will & Emery has expanded its US tax group with two lateral partner hires. Michael Gosk and Thomas Sykes have joined the Silicon Valley and Chicago offices respectively. The firm has also hired two associates for the Washington and New York offices.

Baker & McKenzie has dramatically enlarged its Paris tax group by hiring a team of 11 tax lawyers from Andersen Legal. The team includes one international partner, Véronique Millischer, one local partner, Patrick Philip, and four senior associates. Millischer, who joined the law firm at the beginning of September, is leading the group.

Versatel, the Dutch telecom network company, is restructuring its debt. About ?1.7 billion in Versatel bonds will be converted into cash and common shares, and exchanged for debt. Approval by a court in Amsterdam is expected in October. Shearman & Sterling is representing Versatel, with tax partner Bernie Pistillo and associate Lars Jensen advising. Both lawyers are in the London office.

Countrywide Assured Financial Services Limited has arranged a new 15-year distribution agreement with Friends Provident Life and Pensions. Under the terms of the agreement, Friends Provident Life and Pensions has been appointed as exclusive provider of the life assurance products through the Countrywide estate agency network. The distribution agreement is expected to create payments to the Countrywide Group of around £275 million ($426 million) on a discounted basis over the next 15 years.

Belize Government

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).