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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:

The Isle of Man has vocalized its desire to become an e-commerce centre. But what has the government achieved so far? Tim Craine, director of e-commerce for the Isle of Man, reports

Following the recent announcement of the Indian budget, taxation of dividends has shifted from a fixed-rate system to an entity-based system. Time to take stock of the latest developments to determine the best route of investment into India. By Jairaj Purandare and Avinash Narvekar, Andersen, Mumbai

Private individuals holding a variety of financial products are subject to new capital gains rules following a recent letter from Germany’s Ministry of Finance. By Dr Marcus Mick, Flick Gocke Schaumburg, Frankfurt

The Dutch Supreme Court issued a decision on February 8 2002 that interprets the ?reasonable taxation? requirement under the Dutch abuse of law (fraus legis) provisions (Case No 36 358). The case involved the deductibility of interest for Dutch corporate income tax purposes when a Dutch company paid the interest to an Irish limited company benefiting from the Irish International Financial Services Company (IFSC) regime. Dutch tax law contains a number of measures to prevent erosion of the Dutch tax base. The tax authorities frequently have sought to use these rules to deny Dutch companies interest deductions on certain types of intra-group loan transactions that are considered to have been entered into with the primary purpose of eroding the tax base. In such cases, interest would only be deductible if the transaction was carried out for valid business purposes or if the interest was subject to, and actually taxed at, a ?reasonable? rate in the country of residence of the recipient.

London law firm Howard Kennedy has launched a tax practice with the appointment of two senior tax assistants. Graham Callard, a qualified barrister, joins from Morison Stoneham chartered accountants, now part of Tenon Limited. At Morison Stoneham, Callard provided clients with tax consultancy advice on income tax, corporation tax, capital gains tax, VAT, inheritance tax, national insurance and stamp duty.

Expatriates represent a considerable expense for international businesses. The matter of exactly who should pay the tax bill is often overlooked, but Germany’s new transfer pricing guidelines provide careful advice on the matter. By Dr Alexander Vögele, Dr Arwed Crüger, and Volker Schmitt, KPMG, Frankfurt

The Korean government is considering granting foreign companies tax deductions on the stock options they give to employees

By Emma Nendick, Herbert Smith, London

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