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It is widely known that the EU legislation applicable to VAT is contained in the Sixth VAT Directive (as amended), pursuant to which electricity is considered a tangible good. This means that sales of electricity can take place in the domestic and foreign markets, giving rise to domestic sales, imports, exports, intra-EU acquisitions or supplies. As a tangible good, electricity should also be capable of being transported. However, this conclusion, which is logical for movable goods, becomes doubtful in the case of electricity. As a result, different approaches have been adopted on a country-by-country basis. This treatment dates back to 1977 (Sixth VAT Directive) and refers to heavily regulated environments where supplies were basically domestic in nature with a limited number of operators. Now, 24 years later and in the midst of an EU-wide process of deregulation and liberalization, these rules are insufficient to cope with the variety of situations and growing complexity of the different markets.

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

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

DATE TYPE OF DEAL VALUE ACQUIRER TARGET HOLDER ADVISERS TO TARGET ADVISERS TO ACQUIRER ADVISERS TO HOLDER 30/1/01 Acquisition $275 million ABN AMRO ING Barings North America ING Group Sullivan & Cromwell, New York, Ronald Creamer Davis Polk & Wardwell, New York, Dana Trier, Lin Shaw As for target 2/2/01 Acquisition A$1.1 billion ($574 million) British American Tobacco Minorities in BAT Australasia BAT Australasia N/A Blake Dawson, Australia, Kevin Barry, Sandra Lanigan, Peter McMahon, Sally Hines In-house 31/1/01 Proposed acquisition $1.2 billion Canadian National Railway Company Wisconsin Central Transportation N/A Sullivan & Cromwell, New York, Ronald Creamer Davis Polk & Wardwell, New York, Michael Mollerus 29/1/01 Acquisition $2.5 billion Maxim Integrated Products Inc Dallas Semiconductor Corp N/A Jenkins & Gilchrist, Dallas, William Bowers, Jeffry Blair Simpson Thacher Bartlett, New York, Charlie Rappaport, Nancy Mehlman 24/1/01 Aircraft financing $1.4 billion ABN AMRO ? agent for syndicate of banks financing 30 new Airbus aircraft for CIT N/A CIT Group N/A Denton Wilde Sapte, London, Paul White, Nick Chandler; In-house, Robert Cunningham, Douglas Scott; Paul Hastings, US, John Howitt In-house, Ira Finkelson and Todd Steiner; Holland & Knight, US, Rick Crowley 30/1/01 Acquisition £108 million ($155.7 million) Morley Fund Management Angel Court AP Fonden N/A Lovells, London

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.

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

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

As President Bush's proposed 10-year $1.6 trillion tax cut comes before the US Congress, the business community is considering how it can best ensure its share of the spoils. At present, the only element of the proposed cuts that has a direct effect on business is the proposal to extend permanently the US research and experimentation (R&E) tax credit. However, the timing could be perfect for business to lobby for more.

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