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Having already backed out of the Kyoto agreement, the US has now thrown the OECD's initiative against harmful tax practices into question. US Treasury Secretary Paul O'Neill issued a statement on May 10, stating that the US will not be backing the OECD initiative as it stands and calling for amendments to the proposal.

Like many other members of the OECD and the EU, Spain has enacted very few special tax provisions that apply to e-business. However, to clarify and fix its position in the various international forums where the taxation of e-commerce is being analyzed, in early 1999 Spain's secretary of state for taxes set up a working group whose remit was to conduct thorough research in this area. In July 26 2000, the group submitted its final report and an updated summary was released in October 2000. Two specific issues are of significance to foreign enterprises operating in Spain arising out of the preliminary position on the subject adopted by Spain that departs from current popular opinion.

DATE TYPE OF DEAL VALUE ACQUIRER TARGET HOLDER ADVISERS TO TARGET ADVISERS TO ACQUIRER ADVISERS TO HOLDER 26/05/01 acquisition $675 million Old Mutual, UK St Paul Companies Inc n/a Sullivan & Cromwell, Bill Indoe, Sara McLeod, Terry O'Reilly Weil Gotshal & Manges, New York, Kenneth Heitner, Scott Sontag 25/05/01 merger £28 billion ($39.9 billion) Halifax Bank of Scotland n/a Herbert Smith, London, Bradley Phillips, Nikol Davies Linklaters & Alliance, London, Tom Scott n/a 21/05/01 joint venture EUR4.5 billion ($3.9 billion) n/a n/a Matra BAe Dynamics, Alenia Marconi Systems n/a n/a BAe Systems, Linklaters & Alliance, London, Ian Bowler, Dominic Winter, Elliot Weston; KPMG, London, Caroline Austin, Alex Priestley. EADS, Clifford Chance, London, David Harkness, Alice Gamble. Alenia Marconi Systems, Ashurst Morris Crisp, London Richard Palmer, Kate Eveleigh 11/05/01 global offering $1.8 billion Merrill Lynch, UBS Warburg SunAmerica Life Insurance Company GIC-backed notes and auction market equity securities AIG SunAmerica Global Financing n/a Davis Polk & Wardwell, New York, Po Sit, Michael Farber, Roy Caner O'Melveny & Myers, Los Angeles, Dean Weiner 09/05/01 rights issue £5.9 billion ($8.4 billion) n/a BT (British Telecommunications) n/a Linklaters & Alliance, London, Tom Scott, Mark Kingstone, Stephen Pevsner, Lynne Walkington; Shearman & Sterling, London, Bernie Pistillo; In-house, John Clark, Simon Coward n/a n/a 08/05/01 acquisition $408 million Cypress Group, US, Carlyle Group, US, holding company MedPointe Capital Partners Carter-Wallace Inc, Pharmaceutical division n/a Sullivan & Cromwell, New York, Ron Creamer, John Sweet Simpson Thacher & Bartlett, New York, Charles Rappaport, Adam Rosenzweig n/a 08/05/01 acquisition $739 million Church & Dwight, US, Kelso & Co, US, holding company Armkel Llc consumer brands of Carter-Wallace Inc n/a Sullivan & Cromwell, New York, Ron Creamer, John Sweet Gibson Dunn & Crutcher, Dallas, Jeff Trinklein, Misty Burns; Skadden Arps, Slate Meagher & Flom n/a 07/05/01 acquisition $6 billion Valero Energy Corporation Ultramar Diamond Shamrock n/a Jones Day Reavis & Pogue, Cleveland, Carl Jenks; Washington, Candace Ridgway; Wachtell, Lipton, Rosen & Katz, New York, Jared Rusman 04/05/01 demutualization and flotation £4.2 billion ($5.99 billion) n/a Friends Provident Friends Provident plc Herbert Smith, London, Ross Fraser, Howard Murray, Zoe Brown; PricewaterhouseCoopers, London, Lindsay J'afari-pak, Peter Hoye n/a n/a 03/05/01 acquisition £4.8 billion ($6.8 billion) Vodafone Group Plc BT interests in Japan Telecom, J-Phone, Airtel BT Bird & Bird, London, Richard Ward; BT in-house, London, John Clark, Simon Coward Linklaters & Alliance, London, Andrew Beverley, David Blumenthal; Sullivan & Cromwell 30/04/01 acquisition $1 billion Maxtor Corp Quantum HDD Quantum Corp Wilson Sonsini Goodrich & Rosati, Palo Alto, Ronald Roth Gray Cary, Palo Alto, Dave Plewa 25/04/01 security offering £1.2 billion ($1.7 billion) n/a equity and debt securities in Cazenove n/a Slaughter and May, London, Howard Nowlan n/a n/a 24/04/01 acquisition £150 million ($214 million) Siemens Mannesmann UK Vodafone In-house, Klaus-Peter Husgen; KPMG, Anneli Collins In-house, Regine Nowack, Stephen Beckett; Norton Rose, London, Christopher Norfolk, Rupert Shires 11/04/01 acquisition £130 million ($185 million) Wilson Connolly Holdings plc Wainhomes n/a KPMG Liverpool/Manchester, Malcolm Edge; McGreggor Donald KPMG, London, Margaret Stephens, Gary Jones; Wragge & Co, London, Jeremy Millington 05/04/01 acquisition $1.5 billion Suiza Foods Corp Dean Food Co n/a Kirkland & Ellis, Chicago, Keith Villmow Hughes & Luce, Dallas, Ronald Kerridge; 04/04/01 acquisition £810 million ($1.15 billion) Bass Plc Posthouse Hotel chain Compass Group Freshfields, London, Tim Crossley, Francis Sandison Linklaters & Alliance, London, Charles Hellier, Kathryn Farthing

Sales of goods manufactured in the US or other countries are still the most common way to cover the Mexican demand for raw materials or already processed products. However, in the last few decades, the incorporation of subsidiaries in Mexico has been changing this situation – the product is available in Mexico for the Mexican client or even for export activities. Further, over the last few years, a different approach has entered the arena – the just-in-time idea – through which inventories are owned by a non-resident entity in a warehouse in Mexico. The first tax question for just-in-time holdings is that of whether a permanent establishment exists when the non-resident has a warehouse in Mexico to deliver goods to its clients, but closes every sale directly with the customer from abroad. The author takes the view that no permanent establishment has been created and therefore no income tax should be paid in Mexico.

When a company acquires a fixed asset for a price higher than its fair market value, under certain circumstances the French tax authorities may adjust the taxable income of the buyer. They may also adjust the taxable income of the seller, using various provisions of the French Tax Code.

Does article 17 of the OECD model convention have its basis in outdated and discriminatory assumptions about artistes and athletes? Hold on to your hats for a whistle stop tour of its development, its lack of fit with the modern world and reasons for its repeal. By Joel Nitikman, Fraser Milner Casgrain LLP, Vancouver

In the first in a new quarterly series looking at global transfer pricing developments, the following article tracks recent changes in Europe, Asia-Pacific, Latin America, North America and Africa. By Bill Dodge and Giovanni DiCenso, Deloitte & Touche, Washington, DC

US law firm Atheimer & Gray has established a tax group in London by poaching the head of tax from Fox Williams. Vishvas Kanji is joining Atheimer & Gray in June this year, having been a partner at Fox Williams since 1996.

KPMG Meijburg in Amsterdam has expanded its transfer pricing group by hiring a senior manager from PricewaterhouseCoopers. Eduard Sporken joins the firm on June 1. Sporken had not been thinking of leaving PricewaterhouseCoopers when KPMG approached him before Christmas. However, he was attracted to the opportunity to specialize in transfer pricing. He had also worked with KPMG in the past and knew people there.

Group treasury companies may be viewed as nothing more than a corporate moneybox or as in-house banks. Careful consideration of the circumstances is required. By Gareth Green, Ernst & Young, London