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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

Daan de Bruin and André Toet, of Deloitte & Touche’s International Tax Group in the Netherlands, determine the relevance of debt-to-equity ratios in light of new Dutch hybrid financing rules

Ernst & Young's transfer pricing survey last year covered 638 parent companies and 176 subsidiaries in 22 countries, including Australia, Japan, Korea and New Zealand. The firm's David Lewis in Melbourne and Lisa Lim in Singapore uncover the trends emerging in the region

Considerable tax and interest liabilities may be coming for Mauritian foreign institutional investors on income earned in India, following a ruling of the Delhi High Court. K R Girish, of RSM & Co, Bangalore, explains.

AWG

Tax disputes involving two or more treaty countries giving rise to an issue of double taxation are often resolved through discussions between the competent authorities under the mutual agreement procedure of most tax treaties. Canadian taxpayers that have been reassessed have the choice of disputing the reassessments in the domestic appeals branch of Canada Custom and Revenue Agency (CCRA) and/or submitting the case to the competent authorities.

In 1996 the Norwegian bank CBK (now Nordea Bank Norge) sold its shares in two subsidiaries to two other subsidiaries, seemingly realizing a huge taxable loss. Immediately afterwards the two subsidiaries that had been sold were merged - tax free - into the two respective subsidiaries that had bought them (see diagram 1 below).

Russia is preparing to introduce international accounting standards. Tatyana Paramonova, the first deputy chairman of the Central Bank, has said that the bank has prepared draft instructions for transferring to the international standards. The instructions clarify issues including the calculation of capital and reserves. On July 29 2002 the Council on Audit at the Ministry of Finance approved drafts of audit standards. These standards refer to the standards approved by the International Accounting Federation