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As a consequence of the 2002 comprehensive Mexican tax reform approved by Congress, the Mexican Income Tax Law now considers that when a Mexican tax resident entity ceases to be a Mexican resident under the rules established in the Mexican Federal Tax Code (ie when it changes its tax residence to a country other than Mexico), it will be deemed to be liquidated for Mexican tax purposes. The purpose of this change is to avoid the transfer of Mexican taxable income to a foreign country, as such a transaction is detrimental to the Mexican Treasury Department.

Cross-border reorganizations rank among the most complex tax planning transactions. Two recent changes in German tax law open up new possibilities for accomplishing certain cross-border reorganizations without realization of gain.

UK Inland Revenue may seek to recover tax credits from non-resident shareholders

Sluggish US investment in new plant and equipment gets a boost from a new depreciation bonus offering a 30% tax discount. Keith Martin of Chadbourne & Parke LLP, Washington looks in detail at how it works

Canada announced that its new transfer pricing rules would simplify the APA process for companies. Unfortunately, this is certainly not the case. Hendrik Swaneveld, Martin Przysuski and Venkat Nagarajan of BDO Dunwoody, Toronto (Markham), report

Singapore’s budget aims to encourage economic progress at a time of political uncertainty and intense competition. Taxation targets enterprise and growth, while attracting global talent. By Ajit Prabhu, Deloitte & Touche, Singapore

The recent UK budget announced changes that will make corporate compliance more complex. Simplicity and fairness may be the aim, but achieving it is going to require more hard work for practitioners. Derek Jenkins, PricewaterhouseCoopers, London

The EU Directive on VAT and E-commerce will take effect from July 1 2003. But exactly what impact will implementation of the new system have on businesses? Alan Sinyor of Freshfields Bruckhaus Deringer, London, finds out

The biggest surprise to come from this year's Australian federal budget was the announcement by treasurer Peter Costello on May 14 of an A$1.2 billion ($6.68 million) cash deficit in 2001-2002, attributed mainly to the war on terrorism along with disappointing tax revenues. As such, this year's budget provides for an underlying cash surplus of A$2.1 billion and lays the foundations for surpluses right across the forward estimates. Much of this will continue to fund further defence spending, which the treasurer says will rise by A$1.3 billion to A$14.1 billion in the financial year starting July. A further A$2.54 billion is to be allocated to border protection and domestic security. A large part of this will be funded by extra costs on Pharmaceutical Benefits Scheme (PBS) drugs, and tougher eligibility tests for disability pensions.

Business leaders in Europe have given cautious backing to European Commission plans to pursue a common consolidated tax base. The Commission invited representatives from businesses, governments and academia to a conference last month to comment on four approaches to European taxation: home state taxation, common consolidated base taxation (CCBT), a European corporate income tax and the compulsory harmonization of existing tax bases.