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As part of its income tax reform process, Australia is applying entity taxation to trusts. But the move has been met with mixed feelings. By Michael Taylor-Sands of Baker & McKenzie in Melbourne

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.

Bureau Francis Lefebvre (BFL) is joining the CMS alliance. From March 1 2001, the firm will be known as CMS Bureau Francis Lefebvre.

SJ Berwin has established a Paris office by poaching a private equity team from Salans Hertzfeld & Heilbronn.

Compatibility with international tax treaties has been an important issue relating to the application of French CFC rules in recent years. A new decision by the Paris Administrative Court of Appeals has just ruled in favour of the taxpayer by holding that applying section 209 B of the French Tax Code is contrary to the France-Switzerland Tax Treaty. Section 209 B sets forth the French CFC rules, which constitute an exception to the territoriality principle. It applies to French companies operating an enterprise or owning a qualifying interest (consisting of more than 10% of the share capital or the value of which is superior or equal to FRF150 million ($20.6 million) in a subsidiary set up in a country where such enterprise or subsidiary benefits from a privileged tax regime. The profits of the foreign entity are then subject to corporate income tax in France in the name of the French company on a standalone basis.

Finland has implemented the EC Merger Directive (90/434/EEC) broadly in its tax legislation. The same provisions apply to both domestic and qualifying cross-border transactions. There are no provisions in Finnish company law dealing specifically with the exchange of shares and therefore the normal provisions regarding subscriptions for shares against contribution in kind apply. For cross-border corporate acquisitions, an exchange of shares is often considered to be an attractive alternative, since the acceptance of the exchange offer does not trigger any immediate capital gains tax. Instead, such tax liability will be deferred until the shares received in the exchange offer are disposed of or, in the case of individuals who cease to be resident in Finland for tax purposes within three years after the end of the year the exchange of shares took place, the person ceases to be resident in Finland. When cash compensation is used, capital gains taxation may occur.

The US Internal Revenue Service has proposed new rules governing the opinions tax advisers are allowed to offer their clients with regard to tax shelters. By Keith Martin Chadbourne & Parke LLP, Washington

Neil Woodgate, formerly a partner at Denton Wilde Sapte in London, has joined White & Case's London office.

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