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The Norwegian government has revealed its proposed budget for 1999. Plans include a one percentage point increase in personal and corporate income tax to 29%.

Korea tempts investors

The new German coalition government is set to introduce a package of tax reforms that would reduce corporate income tax by up to 10 percentage points by 2002. The 45% rate for retained profits would go down to 35%. Distributed profits will still be taxed at the current rate of 35%. The SPD and Green parties, the principal members of the coalition, are still negotiating the exact details of the package. The cuts are to be financed by the removal of many corporate tax reliefs. Proposed changes would affect asset valuation, liability valuation and provisions for future expenses and losses. These proposals come from the so-called Schleusser list, a reform programme devised by the Finance Minister of Nord Rhine Westphalia region.

The cable television lobby has finally shown its limits. After a seven month war of attrition with the Argentinian government, cable bosses have finally given up the fight against the introduction of a 10.5% VAT rate on their services. This paves the way for the Congress to pass a wide-ranging tax reform programme which was proposed in March 1998. The government hopes that the reform bill will reduce the employers' tax burden, constrain tax evasion and shift the VAT burden from certain food items to advertising, television and private health care plans. Changes include:

US-based communications group AT&T is to acquire Vanguard Cellular, a US mobile phone operator. The deal is worth $1.5 billion in cash, stocks and $600 million of debt. The acquisition is due to be completed in the first quarter of 1999. Advice to AT&T is from New York law firm Wachtell, Lipton, Rosen & Katz. The tax team is led by partners Jodi Schwartz and Peter Canellos.

Mobile Systems International Holdings, a UK software services company is to merge with Metapath Software International of the US in a deal worth $400 million. Mobile Systems is advised by law firm Linklaters in London. The tax partner involved was Conor Hurley. Tax work also came from the London office of Arthur Andersen.

Netherlands retailer Royal Ahold has made a global offering of shares and notes with a combined value of $2.3 billion. The offering was made to finance part of the cost of the acquisition of US retailer Giant Food. It involved listing on the Dutch AEX stock exchange, the Swiss stock exchange and the New York stock exchange.

Profits from exports of computer software from India have enjoyed tax exemption under section 80HHE of India's Income Tax Act. Computer software was defined to mean any computer program recorded on disk, tape, perforated media or any other information storage device, and including any program which is transmitted from India to any place outside India by any means.

In the September 1998 International update, the provisions of Argentina's tax reform as they apply to residents were analyzed. In this second article, issues affecting non-residents and foreign beneficiaries will be considered based on the project approved by the Deputies Chamber which is pending approval by Congress.

Tax directors are drowning in a sea of information. But as books give way to disks and CD-Roms, Oliver Ralph asks software users and suppliers how electronic information can help tax professionals and how much value these products really represent