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Freshfields' New York partner Robert Scarborough has been elected chair of the tax department at the New York State Bar Association (NYSBA). It is the first time that a non-US firm has provided the association's tax section with its chairman.

CGU and Norwich Union have agreed to merge in a £20 billion ($31.4 billion) deal, forming the UK's largest insurance company. The new firm, CGNU, predicts £250 million in annualized pre-tax cost savings within 18 months of the merger's completion.

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.

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

Advance ruling

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.

The Australian tax system is undergoing enormous change following the Review of Business Taxation. Of particular interest from an international perspective are the draft proposals in relation to thin capitalization. The proposed rules, expected to apply from July 1 2001, will impact all Australian entities:

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: