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Accounting and business advisory firm PKF has hired a director of taxation after raiding KPMG

On August 31 2001, the Netherlands state secretary of finance published a legislative proposal that contains measures against dividend stripping (see International Tax Review, June 2001, discussing new measures against dividend stripping.) The proposed amendments have retroactive effect as of April 27 2001.

HONG KONG

Stock option programmes have become a standard part of the compensation package for a wide range of employees in multinational corporations. A recent decision by the First Chamber of Germany's highest tax court reaffirms the position consistently taken by German courts and tax authorities that individuals receiving employee stock options recognize income when the options are exercised, not when they are granted, at least where the option is non-marketable (decision dated January 24 2001, docket no I R 100/98).

India has enacted a series of transfer pricing regulations, but there are certain omissions that need to be addressed before international taxpayers can act with certainty. By Vispi Patel, Deloitte Haskins & Sells, Mumbai

After years of international criticism over the lack of a transfer pricing regime, the Netherlands is finally codifying its arm’s-length principle. Proposed documentation requirements increase the administrative burden, so companies should review their arrangements well in advance. Eduard Sporken, KPMG Global Transfer Pricing Services, Amstelveen

Singapore has announced a series of tax measures aimed at helping ailing companies through the economic downturn. Deputy Prime Minister Lee Hsien Loong announced the country's second tax package this year, worth around $11.3 billion, in parliament on October 12 2001. The package includes rebates for individuals and corporations as well as property rebates and a reduction in stamp duty rates. Announcing the measures Lee explained: ?We want to encourage enterprise, because the way to recover is for the private sector to create new opportunities and generate more wealth. We also want to reduce business costs so that business can stay afloat and minimise job losses.?

With China entering the WTO, the government is being forced to fully open the domestic market. Restructuring to take advantage of such opportunities will have major tax consequences. By Glenn Desouza, PricewaterhouseCoopers, Shanghai

Australia and the US have amended their tax treaty. The treaty protocol was signed on September 27 after several years of lobbying by business groups. Under the terms of the protocol Australian companies will be able to repatriate their dividends back from their US subsidiaries tax free. The protocol is due to enter into force in January 2003 after both countries have formally ratified it.

The epic trade war between the US and the EU continues, with the US refusing to accept a WTO ruling against its Foreign Sales Corporation (FSC) legislation. It is appealing against the WTO's August 20 decision in favour of the EU's claims that the act and its replacement, the Extraterritorial Income Exclusion Act (ETI) of November 2000, constitute an export subsidy that allows US exporters to save billions of dollars a year.