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Burdens imposed on non-US financial institutions by new US withholding rules can be alleviated by a qualified intermediary agreement with the IRS. By Barbara Hanrehan and Alan Shapiro of Deloitte & Touche, LLP New York and Washington, DC

In the first of three articles on investment in Indochina, John Fisher and Tim Watson of Coopers & Lybrand, Melbourne and Ho Chi Minh City analyse Cambodia’s attractions, which include flexibility and some unique tax incentives and guarantees

Hong Kong’s 1998/1999 budget presented the Special Administrative Region with a challenge – to ballast the economy against instability, but at the same time attract investment. Sunny Choong of Price Waterhouse, Hong Kong examines the results

In the second part of International Tax Review’s survey of oil and gas taxation, Peter Poulos of KPMG, Melbourne examines how Australia’s tax regime applies in the context of the energy industry, and highlights international considerations

The Japanese prime minister Ryutaro Hashimoto has announced a three-year plan to reduce corporation taxes. The aim is to bring taxes down to the same rate as in other industrialized nations. Recent reductions have cut the effective rate to 46.36%. However, there is uncertainty over the strength of the goverment's commitment to low taxes. Jonathan Stuart-Smith, senior manager at Deloitte Touche Tohmatsu in Tokyo notes that: ?Some of the tax cuts announced so far are only temporary but the government is coming under increased pressure to make them permanent.? There are fears that the government may be tempted to increase taxes again once the economy shows signs of recovery. Japan has a high level of public debt and the government is committed to halving its budget deficit to within 3% of GDP. Last year's fiscal austerity law has been delayed to accommodate the reductions, but the government may not allow further delays in future years.

A Canadian business tax committee, set up as part of the 1996 budget, has recommended a reduction in Canada's corporation tax rate from 43% to 33%. The committee claims such a reduction would improve the competitiveness of Canada as a business location.(For related coverage see Canada unveils a new model system.)

Deloitte & Touche in the US has acquired the assets of Real Estate Tax Services Inc. When the acquisition is complete, Real Estate Tax Services will operate in 25 US offices of Deloitte & Touche, as Deloitte & Touche Property Tax Services.

Tax authorities in several countries have recently indicated that they will not allow deductions for expenditure on adapting computer systems for the year 2000. There is widespread concern that computer systems will not be able to cope when the two figure year changes from 99 to 00. Revenue authorities in Australia, Canada, Germany, Switzerland, the UK and the US have all suggested that the cost of solving this problem will be given no special treatment.

The OECD Council has adopted the recommendations of a study by the organization's committee on fiscal affairs on tax sparing. The study looked at the consequences of tax sparing provisions inserted into tax treaties. It showed that such provisions can give significant scope for tax planning and tax avoidance in both the country of the investor and the country of the investment.

US investment groups Blackstone and Colony Capital are to acquire the British Savoy Hotel group for £520 million ($840 million). Deloitte & Touche in New York and London is advising Blackstone. Partners Paul Herrera and Ken MacFarlane are handling tax questions. The Savoy Hotel group is advised by accountants Coopers & Lybrand and by law firm Slaughter & May.