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The Malaysian government has lifted controls on foreign investment in the country. On May 2, Prime Minister Mahathir Mohamad announced the abolition of a 10% levy on repatriated capital gains for foreign investors in the equity market. The exit levy was initially introduced at a rate of 30% in 1999 in an attempt to stabilize the economy following the Asian financial crisis of 1997-1998. It was reduced to 10% in February 2000 and was payable on profits sent out of Malaysia after less than a year.

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 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.

KPMG has set up a new team in New York to advise clients on Chinese tax law

Nik Mehta, a tax partner at Linklaters, has qualified as a solicitor-advocate. This position allows him to represent clients in civil cases in the UK's High Court. Linklaters contentious tax group was set up last year and comprises tax and litigation lawyers. There are six tax lawyers in the group. While a number of the litigation lawyers are solicitor-advocates, Mehta is the first tax lawyer to be awarded the title.

Core competency and outsourcing are hot issues. The following article looks at why handing over non-core activities to the specialists can result in huge benefits for multinationals. By Sharon Cunningham

Finland levies asset transfer tax at a rate of 1.6% of the relevant market value on the transfer of Finnish securities. Excluded from asset transfer taxation are:

New Japanese tax rules permit business reorganizations to be achieved tax-free, provided certain detailed requirements are met. By Gary Peterson and Al Zencak, PricewaterhouseCoopers, Tokyo

New transfer pricing and APA rules have been introduced in the Netherlands as a precursor to codification of the arm’s-length principle later in 2001. By Eduard Sporken, KPMG Meijburg & Co, Amstelveen

The New Zealand government has ignored calls for a cut in corporate tax rates, following last week's budget announcement.