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"Assess first, audit later" programme introduced

In ?an open letter on eight priorities for British business? to Prime Minister Tony Blair, John Ormerod, UK managing partner of Andersen, has recommended that the UK corporate tax rate be reduced to 25%. The letter, dated June 12 says: ?Britain will lead the network economy world if we nurture the creation of new, innovative businesses and allow them to flourish.?

The International Tax and Investment Organisation (ITIO) has warned the OECD to involve small countries properly in discussions or face the effective collapse of its ?harmful tax competition initiative?. With the OECD's Fiscal Affairs Committee due to spell out the future of the OECD's tax at the end of June, the ITIO is insisting that the OECD involve small and developing economies (SDEs) fully in the process of setting any new international standards.

Investors in China need to keep a wary eye on the country’s forthcoming changes to its tax regime. While enhanced transparency looks more likely in the future, so does the removal of certain preferential rates enjoyed by foreigners. By Alan Tsoi and Patrick Su, Deloitte Touche Tohmatsu, Beijing

While the deregulation of India’s insurance industry is a welcome move, confusion over the tax aspects may prevent it from achieving its full potential. By Subhankar Sinha and Vijay Kumar, PricewaterhouseCoopers, Mumbai

Future pension provision for an ageing population is a key consideration of this millennium. The European Commission is attempting to resolve the issue, but its inevitable failure to align the conflicting interests of EU member states has led it to rely on the ECJ, rather than directives, to force the pace of change. By Travis J Barker, PricewaterhouseCoopers, London

Russia's lower house of parliament, the Duma, has approved the draft version of Chapter 25 (Profit Tax) of the Tax Code. As a result, Russia will probably abolish all tax incentives in favour of a significantly reduced tax rate (24%), thus simplifying its notoriously complex tax regime. According to Deloitte & Touche in Russia, the latest text of the draft suggests that companies that were previously granted certain regional tax incentives on the basis of an investment agreement may continue to apply these benefits until the agreement ends.

KPMG has appointed Robert Aland as the midwest leader of the firm's Tax Controversy Services practice and a member of the firm's International Corporate Tax Services practice. Aland will be headquartered in KPMG's Chicago office. At KPMG, Aland will focus specifically on helping large multinational clients address the tax challenges inherent in today's increasingly complex tax environment. His areas of concentration at the firm will include tax controversy services and international tax matters.

Determining the profits attributable to a PE is poorly explicated in practice. The OECD has drafted a proposal to clarify matters. By Philip R West, Andersen Office of Federal Tax Services, Washington, DC, and Robert Janukowicz and W Anne Jie, Andersen, New York

Foreign investors looking to use the beneficial ownership provisions of Russian tax treaties are up against a tradition of inconsistent application and poorly developed concepts. No guarantees are on offer, and the present round of tax reforms offers little hope for improvement. By Victor Matchekhin, Linklaters, Moscow