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At present, in Ireland, there is a difference in the tax treatment of unit-linked investment products in the form of life assurance policies or mutual funds, dependant on whether they are available to Irish residents (Domestic Funds) or are exclusively available to non-residents (IFSC Funds). In the International Financial Services Centre (IFSC) where such products are sold exclusively to non-Irish residents, both the fund itself and the policy holders are exempt from Irish tax. In the case of such products outside the IFSC, however, Irish residents may be unitholders and the fund is subject to tax on an ongoing basis at the standard income tax rate of 24% (22% from April 6 2000).

Corporate tax

The UK Inland Revenue issued a press release on January 14 announcing that legislation would be introduced in the next Finance Bill to widen the circumstances in which companies can calculate their taxable profits in a currency other than sterling. The new rules will apply to accounting periods beginning on or after January 1 2000.

Dividends received by a Finnish company on direct foreign investment are generally exempt from tax. If the Finnish company has distributed the dividend received from a foreign country to its foreign owners, it may previously have been subject to a supplementary tax. As a result, income received from another country may also have been taxed at a corporate tax rate in Finland.

Bruno Gouthiere, of Bureau Francis Lefebvre, Paris analyzes the reasons for repatriating a Luxembourg captive reinsurance business back to France

Under two recent advance rulings, foreign investors in India may be subject to amendments to the Finance Act, designed to prevent Indian companies taking undue advantage of certain concessions. Keyur Shah, Arthur Andersen, Mumbai reports

Nabisco and Hicks Muse, who are acting under the joint venture title Burlington Biscuits, are offering $3.97 for each United Biscuits share. If the offer is successful, Nabisco will also acquire United Biscuits' operations in China, Hong Kong and Taiwan. Although it is reported that the UK company has accepted the US offer, the French consortium Finalrealm has launched a £1.25 billion rival bid.

The Spanish government recently submitted proposals to parliament for new research and development (R&D) tax incentives. These would provide:

Under an amendment to the Sweden-Japan tax treaty, no withholding tax will be imposed on dividends paid to a Swedish/Japanese company, as long as the beneficial owner holds at least 25% of the voting shares issued by the company in the other contracting state. Withholding tax can also be avoided if the shares issued by the beneficial owner are either:

Stock option schemes have traditionally caused tax problems in India, but the 1999 Finance Act has clarified the situation. Mohan Monteiro and Keyur Shah of Arthur Andersen in Mumbai explain how multinationals can benefit and examine a worrying ruling