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Foreign investors in China wishing to take advantage of the post-WTO business environment need to align clearly their business tax strategies and carefully adopt tax-planning techniques to optimize the tax position before and after the deal. By Billy Hsieh and Sandy Cheung, PricewaterhouseCoopers, Shanghai.

On page 34 of the September 2002 issue of International Tax Review, the word ?unpredictable' appears in the last sentence of the last paragraph. The word ?predictable' should replace this word. ITR apologises to the authors.

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 recent decision by the Federal Tax Court illustrates the limited reach of the general anti-avoidance clause in the German tax code (Judgment of March 20 2002 – I R 63/99 – released in July 2002).

The French Administrative Supreme Court has rendered an interesting decision (Conseil d'Etat, May 27 2002, No 125959, Société Superseal Corporation), involving the application of the tax treaty between France and Canada with respect to capital gains derived from the alienation of real estate and the payment of royalties.

It was decided in Commissioner of Inland Revenue v Kwong Mile Services Limited (In Members' Voluntary Winding Up) in July 2002, that income arising from an underwriting agreement was derived at the place where the activities were carried out under the agreement. The taxpayer, a Hong Kong incorporated company, entered into an underwriting agreement with a developer who constructed a commercial and residential building in Guangzhou. The taxpayer undertook the sale of the property. The taxpayer marketed and promoted the sale of the individual units through its agent in Hong Kong. The judge held that, in this case, the place where the underwriting agreement was signed or where the underwriter assumed the risk under the agreement (both in Guangzhou) was not important. The activities that gave rise to the profit were the promotion, marketing and actual sales of the commodities concerned, and the source of the income was derived at the place where such activities took place.

The High Court decision in BMBF raises issues to be addressed by the UK leasing market. The importance of fulfilling the basic requirements for UK allowances when structuring the deal, seems to be a key lesson. By Hugo Jenney and Philip Vickery, Stephenson Harwood, London.

The Pata Package proposed uniform transfer pricing rules and guidelines to ease the compliance burden on members. However, the opposite may in fact be achieved, claims an international coalition responding to the proposals. Summarized by John Lyons and Albertina M Fernandez, Deloitte & Touche, Washington DC.

Australia's long-awaited reform of business taxation has taken a small step forward with the release by the Treasurer of a consultation paper Review of International Taxation. Business has been unhappy with the existing system for some time, and critics argue that the tax regime is holding back the development of Australian enterprises and even driving companies out of the country. The decisions of companies including Brambles and James Hardie Industries to relocate offshore have added weight to these criticisms.