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US financial services companies are lobbying the US government for permanent tax breaks on profits earned abroad. Temporary provisions giving a tax deferral on foreign earned profits are due to expire this year. Estimates of the cost of the tax breaks to the government range from $800 million to $1.4 billion a year, with these figures expected to rise to as much as $10 billion a year by 2011.

Malaysian prime minister Mahathir Mohamad has called for a new international tax on rich countries. This follows calls for a levy on capital repatriations from developing countries by Indian prime minister Atal Behari Vajpayee last month. At the Bo'ao Asian Forum in China this week, Mohamad suggested the UN could administer the tax, and use the revenue to fund development programmes in poor countries. Since part of the wealth of the rich countries comes from the exploitation of the resources of the poor, it is only fitting that they return some of it to the poor, he said.

Ireland became the first member of the EU to be formally told to correct its budget on February 12 2001. At an ECOFIN meeting in Brussels, the EU recommended that Ireland take action to correct its budget, on the grounds that it goes against the Broad Economic Policy Guidelines agreed to by EU members, and threatens to increase inflation. The warning is a response to Irish Finance Minister Charlie McCreevy's 2001 budget that announced tax cuts and increased public spending.

The OECD has released 11 reports and technical papers detailing conclusions and recommendations made by the OECD's Committee on Fiscal Affairs.

You may not be familiar with the name SGI, but at some point you will probably have seen one of its products.

M&A activity in Japan continued at a healthy pace in 2000. Now, the government is planning to further facilitate the transaction process with favourable new tax developments. By Dean Yoost, Takuro Tagai and Al Zencak of PricewaterhouseCoopers in Tokyo

Several options exist to calculate the taxes on a transfer of shares issued by a Mexican entity. As a general rule, and with almost no exception, any transfer involving a Mexican entity is a taxable transaction under Mexican law. Four different possibilities exist to determine the taxes on a transaction involving a transfer of shares in Mexico. They are:

In May 2000, legislation was introduced amending the Japan Commercial Code to allow for corporate spin-offs. This amendment, together with the 1997 merger amendments and the 1999 introduction of stock exchange/transfers, will simplify corporate reorganizations under the Japanese commercial law. This article provides a general discussion of tax legislation expected to be contained in the 2001 tax reform package based on two recent public announcements (one by the Ruling Party on December 13 2000, and the other by the Ministry of Finance on December 19 2000). The new tax legislation will be effective for corporate reorganizations consummated on or after April 1 2001.

Legislation enacted in 2000 gives Germany’s tax auditors sweeping electronic audit rights from 2002 onwards. Most taxpayers have yet to realize the potentially dire transfer pricing implications. By Alexander Vögele and William Bader for KPMG, Frankfurt

The UK Inland Revenue and Customs and Excise are to be given powers to fight crime.