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Brazil reforms cut planning opportunities

Williams Communications Group, the US internet and data provider, has launched a $783 million public offering of shares, as well as $2 billion worth of high-yield notes.

The US communications companies MCI WorldCom and Sprint have merged in a $129 billion deal. Under the terms of the deal, one share of Sprint will be exchanged for $76 of WorldCom common stock. The merger will be tax-free for shareholders.

The French company Alcatel has strengthened its position in the US market by announcing the acquisition of Genesys Telecommunications. Alcatel is paying $1.5 billion for the San Francisco-based company that specializes in developing software for call centres. Genesys had revenues of only $140 million in the 12 months up to June this year, and many analysts believe that the deal has been overpriced. Alcatel argue that Genesys is a safe investment within a fast-moving industry, though its earnings are expected to fall next year.

WTO upholds FSC complaint

Ernst & Young close in on Atlanta firm

Sterling profits in Paris

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 importance which Ireland places on double tax agreements is evident from the number to which it is now party. Since the signing of its first agreement on December 31 1951 with the US, Ireland has entered into 35 double tax agreements. Many of these are with Ireland's neighbours, including fellow members of the European Union, however they also include countries further afield such as Japan, Israel, Mexico, Malaysia, South Africa and Pakistan.