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Effective for accounting periods ending on and after April 1 2002, a tokumei kumiai (TK) with foreign corporations and non-resident individuals that do not have permanent establishments in Japan (non-resident investors) are subject to a 20% withholding tax on the distribution of TK profits under contracts. The 20% withholding tax is the final tax on such distributed TK profits.

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

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

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.

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held in a recent decision that payments made to non-residents should be taxed at the rate prescribed under the relevant Finance Act and not at the rate prescribed under the applicable tax treaty between India and the country of which the recipient is a resident. According to the ITAT, the rate prescribed in the tax treaty is applicable only for the purposes of assessment and not for deduction of tax at source. The decision of the ITAT concerned the assessment year 1991-92 and has been passed by a Single Member Bench. There was no representation by the assessee and the matter was decided ex-parte.

Due to Congress's failure to extend a financial transactions tax (the CPMF), Brazil has announced that it will cut planned expenditure of R$5.3 billion ($2.1 billion) from this year's budget to compensate for the shortfall. The extension of the CPMF had to be approved in March if the tax was to be collected, however the bill has been stalled by political wrangling. It is estimated that Brazil will see a shortfall of R$400 million every week when the CPMF expires this month.

Eversheds has secured Gary Telford, formerly a tax partner in Ernst & Young's UK global employee solutions practice, as a tax director. In his new role, Telford will be focusing on three major areas with the primary objective of developing new business. With Ernst & Young, Telford worked with clients ranging from owner-managed businesses to major listed and global companies.

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

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