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  • The merger of automobile groups Daimler Benz and Chrysler will create a combined group worth $92 billion. It has been estimated that legal and accounting advisers will earn up to $200 million from advising on the deal.
  • Elan Corporation, a specialist pharmaceuticals group based in Ireland, has made a successful £420 million ($700 million) bid for California-based pharmaceuticals company Neurex. The acquisition marks the company's first step into the US hospitals market. Elan is making the transformation from a research company to a drugs group.
  • General Electric Company has made an agreed bid of $1.4 billion for Tracor, a Texas-based electronics company.
  • Caja de Ahorros del Mediterraneo, Spain's fifth-largest savings bank, has bought the Spanish operations of UK bank Abbey National. The deal is valued at £120 million ($195 million).
  • Dutch chemicals group Akzo Nobel has made a successful £1.8 billion ($3 billion) bid for Courtaulds, the UK paints and fibres business. The deal will make Akzo Nobel the world's largest paints company. The offer is worth 450 pence a share.
  • The standard VAT rate of 6.5% will be increased to 7.5% with effect from January 1 1999. Furthermore, the reduced rate VAT tariffs of 2% and 3% will be increased to 2.3% and 3.5% respectively. These changes will necessitate amendments in VAT payers' contracts, systems and invoicing procedures. This is the first increase after the introduction of VAT in 1995. Companies are, therefore, not yet used to handling such changes.
  • With effect from January 1 1998 new measures were introduced in the Spanish value-added tax (VAT) Law according to which certain subsidies – those not directly linked to the price of taxable transactions– received by VAT payers established in Spain will affect the recoverability of input VAT.
  • Since our last Russia update in the March issue of International Tax Review, there have been a number of significant legislative and judicial developments. These include: amendments to the Law on Excise Tax and the Law on Securities Tax; important rulings by the Constitutional Court concerning pension fund contributions for individual entrepreneurs; the confiscation of goods and vehicles by Customs authorities; and enactment of a Federal Law on the 1998 budget.
  • In the June 1997 issue of International Tax Review, we reported on a ruling by the Federal Tax Court in which the court rejected the amortization of purchased trademarks – in the absence of special circumstances – under the valuation law as in force through to December 1992. At the time, the tax authorities were expected to give assurances that they would not seek to apply the ruling for income tax purposes.
  • The French tax authorities recently reasserted their wish to resort to additional measures to improve the effectiveness of transfer pricing controls.