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Germany has amended its tax regulations for the treatment of investment funds. Wolfgang Oho and Gerald Plenge of Arthur Andersen, Frankfurt, review the previous regulations and look at what the new rules hope to achieve

The US Treasury Department has announced a new US income tax treaty with Luxembourg.

Members of the OECD's Committee on Fiscal Affairs have reached a consensus on how to apply the definition of permanent establishment to the taxation of electronic commerce. The consensus means that online businesses can no longer afford to ignore the tax consequences of where they locate their equipment, according to Mike Perkins of PricewaterhouseCoopers in London.

Luis Liñero, Arthur Andersen, Mexico City

The German tax rules in force prior to enactment of the landmark German tax reform package reported on in the September 2000 issue of International Tax Review generally permit the purchaser of a German corporation to reorganize the corporation as a partnership at no income tax cost, and thereby obtain a step-up in the basis of the disappearing corporation's assets. The step-up includes previously non-capitalized intangibles, such as self-generated goodwill, and creates additional depreciation volume for personal or corporate income tax purposes, but not trade tax purposes, where the disappearing corporation's outside basis (price paid for its shares) exceeds its inside basis (book value of its assets).

As a result of several upstream companies in Brazil now being on the point of drilling the first wells in their awarded areas, the level of investment in equipment (fixed assets) is on the increase. Finding a way to acquire these assets in as tax-efficient manner as possible is extremely important during this phase of uncertainty.

On December 31 1999 the Argentine government adopted a new tax reform package. The 1999 tax reform law amended the Argentine income tax law (AITL) by introducing certain significant changes to Argentina's transfer pricing regime, as well as changes in the treatment of foreign source income earned by Argentine entities or resident individuals (Argentine residents).

Following much discussion, the OECD has issued the final changes to the commentary to article 5 of the Model Tax Convention. Machiel Lambooij, of Freshfields Bruckhaus Deringer, Amsterdam, assesses the balance that has been struck between the new economy and the old

The UK media company Carlton Communications has announced that contracts have been signed with Thomson for the proposed disposal of Technicolor. The transaction values Technicolor at $2.1 billion and is subject to shareholder approval.

Norway's ruling Labour Party and the central coalition have agreed on Budget amendments for 2001. The main amendments are described below.