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Whether a duty imposed on the capitalisation of undistributed, but previously taxed, profits of a capital company constitutes a capital duty prohibited by Council Directive 69/335/EEC, as amended by Council Directive 85/303/EEC.

China’s efforts to boost new technology could have welcome consequences for foreign investors. Elizabeth Thong of Simmons & Simmons in Shanghai explains how multinationals can benefit from the latest incentives

The German CFC regime was, like many others, founded on the principles of the US’ Subpart F. Since its inception in 1972, the rules have been adapted to focus on capital investments. Mark Smith and Diether Laudan of Ernst & Young in Stuttgart explain the rules

After a string of victories in the US tax courts, the IRS has lost a transfer pricing case. Not only did Compaq (the company concerned) avoid the excess tax that the IRS had charged, but they also received a positive adjustment of $21 million. This is the first time in a reported case that a company has received a positive adjustment.

When Japan lifted its restriction on holding companies last year, it opened up a range of possibilities. Dean Yoost of PricewaterhouseCoopers and Masaakira Kitazawa of Anderson Mori advise on how to avoid the pitfalls and make the most of the new opportunities

On July 9 1999, the Treasury formally withdrew the proposed and temporary regulations issued on March 23 1998, relating to the use of hybrid branch entities to avoid subpart F income. At the same time, the Treasury issued new proposed regulations on the treatment of hybrid branch transactions. The Treasury also officially withdrew the proposed regulations relating to the treatment of foreign partnerships for purposes of subpart F (Brown Group regulations) but did not issue any new regulations in their place. New regulations regarding the treatment of a controlled foreign corporation's (CFC) distributive share of partnership income will be proposed at a later date.

Punch Taverns is acquiring Allied Domecq Retailing in the UK for £2.75 billion ($4.4 billion). This will make Punch the second-largest public house operator in the UK after Nomura Securities. Rival leisure company Whitbread retired from the fight to gain control of Allied when the UK Department of Trade and Industry decided that The Competition Commission would have to examine the Whitbread bid.

Australia signed a Double Tax Agreement (DTA) with South Africa on July 1 1999 and a Protocol amending the Malaysian DTA on August 2 1999. The DTAs are not yet in force.

After years of exclusively providing tax advice, Netherlands firm Loyens & Volkmaars has decided to expand its practice. Taking advantage of the closure of general practice firm Loeff Claeys Verbeke, Loyens has recruited 26 partners in Rotterdam and the Hague. Their areas of speciality include corporate, labour, banking and real estate.

The world of faceless tax advice moved one step closer when Ernst & Young announced the launch of the first on-line tax adviser. Endearingly named Ernie, the adviser will allow clients to ask tax questions and receive written answers on-line.