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

The French tax authorities have issued new administrative guidelines dated April 16 2002 (8 M-2-02) in which they give up taxing real estate capital gains realized by a French partnership held by non-residents under section 244 bis A of the French Tax Code.

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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

Financial statements are due to come under increased scrutiny following the Enron bankruptcy. Intercompany pricing once again finds itself in the spotlight. By Steven D Harris and Paul B Burns of KPMG, Washington, DC and Costa Mesa

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.

The US is once again taking a hard line with tax avoidance. Not only are there two bills before Congress proposing the end of corporate inversions, but also, in Notice 2002-35, the Internal Revenue Service has informed taxpayers that it is aware of a transaction involving notional principal contracts used to generate tax losses. It has stated that the tax benefits of this will no longer be allowed for federal income tax purposes.

New Zealand firm Chapman Tripp has lured a KPMG tax partner to head its Auckland tax practice. Craig Elliffe joined the firm in early April after leaving KPMG at the end of March. Chapman Tripp approached Elliffe and he made the decision to join in February. According to Elliffe, the decision to move was prompted by the fall-out of the Enron scandal on the work of tax advisers in big four firms. He explained: ?I was very happy at KPMG so there was no sense of dissatisfaction. However, I was concerned about the effect of Andersen's fall-out on the accounting profession and the trend towards independent advice.

Cleary Gottlieb Steen & Hamilton is the latest US firm to boost its UK tax group by poaching from a magic circle firm with the hire of a senior partner from Linklaters. Nikhil Mehta, who specializes in structured finance and contentious tax work as well as M&A, will be joining the firm on July 1 this year. Cleary Gottlieb approached him several months ago and his recruitment was decided in a partners' meeting during the first week of May.

In 1999, Congress directed the Internal Revenue Service (IRS) to conduct a study of compliance with the documentation requirements of Internal Revenue Code (IRC) section 6662. The IRS recently released a report detailing its findings.