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ECJ postpones ruling on Austrian dividends received tax

The Paris Administrative Lower Court held in a recent decision (June 26 2001, Société Janfin), that tax credits (avoirs fiscaux) attached to French dividends could not be used to pay French corporate income tax when a company purchased shares only to use the tax credits attached to dividends, and resold these shares to their original owner immediately after receiving the dividends and tax credits.

On June 13 2002, just one day after approval by the Brazilian Congress, President Fernando Henrique Cardoso signed an amendment to the Brazilian Constitution. As set out under Constitutional Amendment Number 37, the application of the temporary contribution on financial activities (CPMF) was extended until December 31 2004. The CPMF was first created in 1997 as a temporary tax on financial transactions and is charged on every debit (a withdrawal or transfer for example) from a bank account. The following CPMF rates apply until the end of 2004:

CHINA

The Supreme Court agrees to review the Boeing decision, a new information agreement is signed with Netherlands Antilles, and the IRS denies APAs to check-the-box taxpayers. By Hal Hicks, David Benson and Peg O'Conner, Ernst & Young, Washington

A US tax bill aiming to improve international competitiveness and simplify the complicated US tax system could hit foreign investment into the country. The bill, proposed by the chair of the ways and means committee, suggests a comprehensive tax overhaul.

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McDermott Will & Emery has hired a former Andersen partner for its Chicago office. Jeffrey Olin joined the Chicago office on June 10 this year and is focusing his practice on international tax including inbound and outbound planning and compliance, export incentives, computerized applications, e-commerce and tax planning for multinationals. At McDermott, Will & Emery, many of his clients are in the manufacturing industry. Olin, who is qualified as both a lawyer and an accountant, also handled due diligence and IRS controversy settlements during his time at Andersen. He approached Andersen about joining and was in discussions for almost a year.

Indian Finance Minister, Jaswant Singh has refused to initiate a review of the existing India-Mauritius tax treaty. Critics of the treaty argue that in its present form it is being misused by Indian businesses. At the moment Indian companies or individuals are able to set up a Mauritian company and make investments into India while under the double tax treaty capital gains tax is only payable in one country. This has been used by companies to avoid paying capital gains tax on investments in India and in 2000 was branded abuse of the treaty by tax inspectors.

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