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According to the Korea Herald the Korean National Tax Service (NTS) has started its first investigation into Korean firms use of tax havens. According to the report 64 companies are being investigated over possible tax evasion totalling around 411 billion won. The investigation is reportedly possible because of improved information exchange programmes.

The Chilean government has announced amendments to its reform package announced on July 18 after admitting that the original package was flawed. The amendments were submitted to congress on August 13 and remove some of the more controversial aspects of the reform package aimed at increasing the use of Chile as a gateway to investment in Latin America. Despite the amendments critics argue that there are still problems with the package and that it may not be sufficient to provide the desired boost in foreign investment. The central provision of the original package was beneficial tax treatment for investments abroad through Chile and this has been left relatively untouched.

China's Guangxi province wants to set up free trade and export processing zones similar to those in neighbouring state Guangdong. The vice-chairman of the province, Zhang Wenxue, said that the province is proposing to create a free trade zone in Dongxing and Pingxiang, which border Vietnam. The province also wants to see a bonded zone for export processing in Beihai. Free-trade zones are used to attract foreign investment into the provinces but may be under threat as a result of China's entry to the WTO.

European and other non-US based multinationals investing in the US face the prospect of substantial increases in the corporate income tax liabilities of their US operations, if a series of legislative proposals are passed. By Peter H Blessing, Shearman & Sterling, Munich

Tax professionals across Europe are being pushed out of their comfort zone. Georgina Stanley finds out why they are avoiding risk and how they are trying to adapt the new landscape

Agroup of tax havens has stepped up its pressure on the OCED to address the use of corporate vehicles for illicit purposes within its own membership before taking action against non-OECD countries. The International Tax and Investment Organisation (ITIO) and the Society of Trust and Estate Practitioners commissioned Canadian law firm Stikeman Elliott to review the regulation of corporations, trusts and limited partnerships in 15 OECD and non-OECD countries.

The tax authorities have lost a transfer pricing case in the Dutch Supreme Court. Following the new codification of the arm’s-length principle, however, taxpayers may not always be so lucky – insufficient transfer documentation can reverse the burden of proof. By Dave Rutges, Eduard Sporken and Barry Larking, KPMG Meijburg & Co, Amstelveen, the Netherlands

Early this year, two notices were issued to encourage the export of manufactured products and to expedite and strengthen the tax refund administration for exported goods. The two notices dramatically changes the current tax policies for exported goods, including:

Drinks company Diageo has agreed to sell Burger King for $2.23 billion in cash. The fast food corporation has been bought by a consortium composed of Texas Pacific, Bain Capital and Goldman Sachs. A portion of the purchase price is dependent on Burger King Corporation satisfying certain performance targets in its financial year ended June 30 2002. The drinks company intends some of the cash proceeds to be returned to shareholders and some reinvested in the drinks business. The tax cost on the disposal is approximately $175 million.

Zurich, Switzerland