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A landmark victory by a Polish foundation in the Supreme Court could pave the way for hundreds of other organizations throughout the country with similar tax liabilities. In what is one of the biggest ever tax litigation cases in Poland, the Foundation for Polish Science is to receive around $25 million back from the government in income that should have been tax exempt. The case had already received unfavourable hearings in both the Regional Tax Office and the Supreme Administrative Court before the Supreme Court decision on March 20 2002 ruled them to be null and void. This means that many other similar organizations set up to carry out and fund research in the country will also be able to claim back money paid to the government in taxes. With total refunds potentially reaching as much as $70 million dollars, the government may even have to change its fiscal budget in order to meet the repayments.

After months of stalemate in its campaign against harmful tax practices, the OECD has finally made some progress. Though the extended commitment deadline was February 28 this year, 13 of the 35 jurisdictions listed as havens on the organization's 2000 report have given letters of commitment dated on or after February 27. Under the revised conditions the territories must commit to implementing transparency and effective exchange of information by December 31 2005. The Maldives, Tonga and Barbados were removed from the list without committing after satisfying the OECD that they no longer met the qualifying criteria of tax havens. With refusals to commit from Vanuatu, Samoa and the Marshall Islands together with the countries that had already committed, that leaves just seven countries yet to make an announcement.

Once again, all eyes have been on Andersen this month, and the spectacle has not disappointed. The remaining big four have been involved in merger discussions for all or part of the ailing firm, the network is breaking up and Joseph Berardino, the CEO, has stepped down in an attempt to save the US firm. Finally, according to reports in the Financial Times, Andersen is set to cut up to 6000 jobs in the US.

Relations between the US and the EU continue to decline. The WTO arbitration panel is still deciding on the amount of compensation the EU can claim over the US Extraterritoral Income Exclusion Act (ETI). Before that there were rows over bananas. This time the issue is steel.

KPMG’s ambition for a union with the non-US operations of beleaguered Andersen has taken another knock as partners in Andersen’s Spanish arm voted on April 1 to merge with Deloitte & Touche

Ernst & Young and Andersen announced on March 28 that they have signed a Memorandum of Understanding to integrate Andersen Australia into Ernst & Young

Following the departure of Tim Sanders for Skadden, Arps, Slate, Meagher & Flom, and not long after taking a multidisciplinary approach in London with the recruitment of Pricewaterhouse- Coopers partner, Guy Madewell, McDermott has expanded its tax group in the UK and the US. The firm has gained an in-house tax partner in London and has poached a team of four Fenwick & West tax lawyers for its Palo Alto practice. Jonathon Ivinson is joining the firm's London office on April 29 2002 from telecoms provider Carrier1. He was vice president of taxes at the company and prior to working in-house was a tax lawyer at Macfarlanes, where he practised with the head of McDermott's London tax group, Peter Nias.

The UK is to introduce a new tax regime for intangibles, including goodwill and intellectual property.

Spain implemented the EU parent-subsidiary directive 90/435 in 1991 with some anti-abuse clauses (under article 1.2 of the directive). These clauses deny a tax exemption on dividends when the majority of the voting rights of the EU parent is directly or indirectly held by companies or individuals that are non-EU residents. This limitation does not apply if:

Despite new CFC legislation in Italy, a lack of EU harmonization means that taxpayers may still use a variety of taxing jurisdictions to get the best rate for their income. By Marco Giuliani, of Professionisti Associati Deloitte & Touche, Milan