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Allen & Overy has hired a team of Ernst & Young tax lawyers for its Amsterdam office. Partner Olaf van der Donk, who was previously the head of Ernst & Young's M&A tax group in the Netherlands, started on September 9 and will lead the team, which includes three associates from Ernst & Young and a fourth new associate. Two associates started in early September and the others will start in November. The associates joining Van der Donk are Roelof Goudswaard, who has 12 years' experience as a tax lawyer, Olaf Kroon, Jochem Kin and Maarten Blomme.

Royal Philips Electronics unit Philips Medical Systems and the Rabobank Group unit De Lage Landen are setting up a joint venture in the US. The new venture will be called Philips Medical Capital and will provide financing for the purchase of the full diagnostic imaging equipment that Philips Medical Systems produces throughout the US. The new venture will be based in Pennsylvania and will be 60% owned by De Lage Landen. De Lage Landen will treat it as a consolidated subsidiary. Schulte Roth & Zabel represented DeLage Landen, with Daniel Blickman leading the tax side. Sullivan & Cromwell advised Philips, with Andrew Solomon in New York leading the tax group.

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 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.

Following the publication of the revised Catalogue of Foreign Investment in Industries, effective April 1 2002, the State Administration of Customs issued a circular clarifying the import value-added tax and customs tax exemption for equipment imported by a foreign invested enterprise for its own use within the enterprise's total investment amount. The circular states that "encouraged" projects approved after April 1 2002, and "encouraged" projects that were once categorized as "restricted B" projects in the old guidance catalogue, which involve technology transfers, are now both entitled to the tax exemptions.

If the European Court of Justice (ECJ) upholds two advocate general decisions, tax deductions would be available to EU-parent companies borrowing funds to finance subsidiaries within the EU, irrespective of how those subsidiaries are taxed

Dutch firm NautaDutilh is opening an office in Luxembourg at the beginning of November.

US firm Shearman & Sterling has continued the expansion of its international tax team by hiring its fifth lateral partner in the past year.

European Commissioner Pedro Solbes has expressed his concern at France’s 2003 budget, which he believes will prevent the country from reaching a balanced budget position by 2006