Search results for

US Treasury Secretary Paul O'Neill has revealed that he wants to abolish corporation tax. In an interview with the London-based Financial Times, O'Neill states that in the future he would like to eliminate corporate income tax and capital gains tax for companies. The changes would not be considered until President Bush's $1.35 trillion tax cut has been enacted and social security has been looked at. In the interview, O'Neill refers to the present tax system as ?an abomination? and claims that George W Bush is also keen to change the tax code. Corporate taxes account for around 10% of federal revenues and O'Neill proposes to make up the lost revenue by increasing personal income taxes.

The Thai Ministry of Finance is to make the process of claiming VAT refunds quicker and easier for companies that use local raw materials, according to a report in Bangkok-based newspaper Krungthep Turakij. New regulations designed to extend the refunds to more manufacturers will ultimately apply to all industries, but will be introduced for the textile industry first because it is a major export earner for the country.

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.

The Dutch government has decided to issue a new proposal for measures against dividend stripping. Dividend stripping refers to a transaction in which a shareholder transfers its right to receive a dividend to another taxpayer prior to the declaration of the dividend. In most cases, the underlying reason is that the transferor is not in a position to offset the (Dutch) dividend withholding tax against personal or corporate income taxes, whereas the transferee is allowed to offset this tax.

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

Recent developments in the US courts, the IRS, and the WTO and OECD are looked at in detail

The German Tax Reorganization Act in force since 1995 permits three types of divisive reorganizations – split-ups, split-offs and drop-downs – without triggering tax, provided two principal conditions are met: any unrealized appreciation (hidden reserves) inherent in the assets transferred must remain subject to German taxation; and the assets transferred – and for split-offs the assets retained as well – must constitute a branch of activity, an interest in a commercial partnership, or a 100% share in a corporation. The latter requirement poses many issues. Until recently, the tax authorities interpreted the key term "branch of activity" in such a way as to severely restrict the options available to taxpayers when structuring divisive reorganizations.

The UK has vetoed plans to introduce legislation on e-commerce taxation in the EU. The revised Swedish proposal would have made non-EU companies selling digitized products to EU consumers liable to value-added tax (VAT) on their sales. This would have levelled the playing field with their EU competitors who are already being charged VAT.

Romano Prodi, president of the European Commission, has called for a European tax to finance the EU budget