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Sterling profits in Paris

Revenue Canada has finally released its long-awaited transfer pricing circular, detailing its attitudes to legislation put in place two years ago

The UK has announced a crackdown on the use of island tax havens, but practitioners doubt the effectiveness of the reforms.

Tax measures governing share buyback, capital reduction, and share redemption transactions of Singapore resident companies were recently introduced in Singapore under the Income Tax (Amendment) Act 1999.

As expected, the European Court of Justice (ECJ) has ruled in the taxpayer's favour in litigation between the French Compagnie de Saint-Gobain SA and the German tax authorities (judgement of September 21 1999 – see our prior report on this case in the December 1997 issue of International Tax Review). The ECJ held that articles 52 and 58 of the EU Treaty (now articles 43 and 48 respectively) were violated by denying tax preferences available to German domestic corporations to the domestic permanent establishment of an EU corporation. At issue were the following preferences:

Revenue Canada has just issued a release detailing its views on how it will apply transfer pricing legislation and penalties. Canada's penalties apply to post-1998 taxation year adjustments, and are calculated as 10% of the adjustment to income or loss. Taxpayers can avoid a transfer pricing penalty by preparing 'reasonable effort' contemporaneous documentation that demonstrates adherence to arm's-length principles. The Canadian authorities' view as to the meaning of reasonable effort is extensive.

The UK chemicals company ICI has sold its acrylics business in Belgium to Ineos Acrylics for $847 million.

The international telecommunications network Global Crossing has bought the UK company Racal Telecom for $1.7 billion. Global Crossing, a US company based in Bermuda, outbid the US company Energis for Racal, and will use the deal to strengthen its presence in the UK.

The $11.6 billion deal between US companies Union Carbide and Dow Chemicals is near completion, with Union Carbide shareholders voting on the merger on December 1.

Davis Polk conducts Merrill Lynch deal