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The EU is delaying the proposed takeover of Andersen in France by rival professional services firm Ernst & Young. The European Commission's antitrust regulators are concerned about how the proposed union will affect competition in the domestic audit market. The Commission has requested that Ernst & Young re-submit its application for approval because it discovered that the firm underestimated the French market share that would be controlled by the combined firm.

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.

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.

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:

The US had until the end of August to announce a full list of steel products that will be exempt of tariffs in its long-running battle with the EU. Press reports have indicated that the US planned to release the final exemptions in the week ending August 25 2002. So far the total of imports excluded from tariffs imposed in March this year stands at around 8% of the 13.1 tonnes affected. The EU has drawn up detailed plans for sanctions up to a value of Eu397 million ($387 million) on US exports if the US safeguards tariffs remain in place. EU officials have stated however, that they will not act until September 30, by which time the full list of exemptions will be clear.

Zurich, Switzerland

The UK government has dropped Ireland from the list of countries enjoying exemption from the CFC rules. Jason Short and Alistair Craig of Ernst & Young’s International Tax Service Group in London work out why and what it will mean

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