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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.

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

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

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.

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.

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.

As of January 1 2002, there is in effect an income tax treaty between Luxembourg and Mexico (the Treaty). This treaty not only adds an important European finance centre to Mexico's already broad tax treaty network but it also normalizes Luxembourg's status for tax purposes within the terms of Mexican law.

In a decision that may mean less than meets the eye, Germany's highest tax court has handed down its first decision on a provision added to the tax code in 1994 to combat treaty shopping. The decision is Federal Tax Court judgment of 20 March 2002 (I R 38/00 – published only electronically so far). The treaty shopping statute read as follows in 1994, the year at issue: