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The UK does not have a single thin capitalization code, but recent additions to the tax rules significantly change the regime. David Hughes of Allen & Overy, London evaluates the three techniques used by the UK to combat thin capitalization

The Swedish government has proposed that the parliament accepts certain changes to the tax treaty between Sweden and the People's Republic of China.

Advance ruling

Despite widely expected changes, the financial secretary, Donald Tsang Yam-Kuen, made no significant changes to Hong Kong's tax regime. Only three measures were announced: a reduction in the stamp duty on stock transactions (from 0.25% to 0.225%), an extension of the diesel duty concessionary rate, and an extension of exemptions for electronic vehicles.

Proposals in the UK budget look like transforming the UK from one of the friendliest tax regimes for overseas investment to one of the least favourable of all major investor countries. By Bill Dodwell, Arthur Andersen, London

Hubertus AG was a Swiss corporation with no activity in France. However, it owned 90% of the shares in a French SCI – a real estate partnership – which had realized a capital gain on the sale of a property on the French Riviera.

On February 28, Canada's finance minister, Paul Martin, presented his year 2000 federal budget message. A balanced budget was put forward that also proposed the first personal tax rate cuts in 12 years. Capital gains taxation was relaxed by reducing the taxable income inclusion rate from the current three-quarters, to two-thirds inclusion. The attractiveness of employee stock options was enhanced through deferring taxation of qualifying options until share disposition, as opposed to the historical taxation on option exercise.

An important decision by a lower German tax court (Tax Court of Rheinland-Pfalz) appeared in the professional journals in mid-1999. The decision's headnote reads as follows:

Deloitte & Touche has appointed Martin McClintock as its first global director of e-business tax. McClintock, who has been with the firm for 20 years, will move from his role as leader of international tax for north California, Hawaii and the Pacific Northwest.

The UK steel industry is worried that government plans for a climate tax in 2001 could drive foreign investment out of the country. Although the tax was first announced in March 1999, industry protests forced the UK Treasury to slash the levy from £1.75 to £1 billion in November. But energy-intensive companies are lobbying for further reductions.