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The UK has closed a tax avoidance loophole in its Controlled Foreign Companies (CFC) rules. Previously banks, insurance companies and other financial concerns have been able to buy shares in a foreign subsidiary, receive tax free dividends in return and subsequently sell the shares back to the foreign company for a nominal sum. The loophole was closed in the budget announced by Chancellor Gordon Brown on March 6.

Freedom of establishment – Free movement of capital – Advance payment of corporation tax on profits distributed by a subsidiary to its parent company – Parent company having its seat in another member state – Breach of Community law – Action for restitution or action for damages – Interest.

Professional services firm Arthur Andersen has changed its name to Andersen. The rebranding is effective immediately.

India has introduced detailed transfer pricing laws for the first time. Multinational companies must now ensure transactions with subsidiaries in India are conducted as if they were deals between unconnected companies with the price of goods determined by market forces alone

The US Internal Revenue Service has launched a crackdown on illegal offshore trusts.

UK firm DLA has hired Jasmine Shah as a corporate tax partner from professional services firm KPMG. Shah worked in the M&A tax practice at her former employer, and her experience includes M&A work, de-mergers, share buybacks, and flotations. Shah trained at Clifford Chance and worked in the UK firm's tax group for eight years before moving to KPMG.

Belgian finance minister Didier Reynders has said he will push for tax harmonization in the Eurozone when Belgium takes on the EU presidency in July this year. He was speaking at a conference last week on preparations for the introduction of Euro notes and coins. Reynders is well known as a strong supporter of the single currency and of closer political cooperation in Europe.

Sixth VAT Directive – Deduction of input tax – Holding company – Involvement in the management of subsidiaries – Dividends – Costs incurred in acquiring shares.

Cooley Godward has recruited an international tax specialist as the US firm looks to strengthen its cross-border practice. Mark Hrenya joins Cooley's Denver office as a partner from US rival Holme Roberts & Owen, having served as chair of its international group. Hrenya advises technology clients on the federal income tax implications of cross-border M&A, the structuring of their international operations, including foreign currency transactions, earnings repatriations, transfer pricing matters and the use of income tax treaties.

India's mutual fund industry is to benefit from government plans to slash the 20% dividend tax to 10%, along with a 1.5% cut in small saving rates. Mutual funds expect the tax cuts to lead to an increase in money flowing into the industry.