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In a draft bill soon to be submitted to parliament, the Belgian government sets out new rules concerning the tax treatment of employee stock options and warrants. The new rules focus on two aspects which have in the past been the object of debate ? the taxable event and the valuation of the taxable benefit resulting from such option or warrant. Once approved by parliament, the new rules will apply to all employee stock options and warrants granted as of July 1 1998.

During a recent parliamentary debate, the Netherlands Under-Minister of Finance stated that for the time being the current rules of Netherlands tax law will not be amended for electronic commerce transactions. A report released under the auspices of the Ministry of Finance earlier this year suggested applying a value-added tax (VAT) rate of 0% for electronic commerce transactions. This report was drawn up by a working party which included independent experts.

Following the Irish government's announcement of the new corporate tax regime (as outlined in the September issue of International Tax Review), the Department of Finance has given further guidance and clarification on the implications of the new regime for the International Financial Services Centre (IFSC) in Dublin.

The French government wants to extract high taxes from the banking and financial services sectors to pay for tax cuts in other areas of the economy. Under measures proposed by the government in September this year, contributions made by the sector to the taxe professionelle (business tax) will go up to finance a reduction for other sectors. The proposals are part of the reform of the business tax. The tax is based on assets and salaries, and rates vary from region to region. Under the proposals the salary base would be removed from the tax. The socialist government hopes that this will encourage businesses to hire more employees and so reduce unemployment.

Colombia's finance minister, Juan Camilo Restrepo, has sent a message to the country's congress urging it to pass proposed tax reforms quickly. The package was introduced at the beginning of September 1998, as part of government efforts to reduce the budget deficit. The most important proposals deal with sales tax. While the rate is to go down from 16% to 15%, a large number of new goods and services are to be taxed. These include some foods, business rents, credit cards, farming machinery and certain household goods.

Merrill Lynch lost another round in the US courts in late August, in its efforts to defend a complicated financial product that it sold to prominent US corporations to help the companies generate capital losses. The decision is important for international tax planning because it shows the fragility of financial products that have little purpose other than generating tax results when tested in the US courts.

Schlumberger Technology Corporation, a wholly-owned subsidiary of Schlumberger oil and energy technical services group, has completed a merger with Camco International.

Textron, the US-based financial services and manufacturing group, is to buy David Brown Group of the UK. The deal is valued at $326 million. David Brown Group is a manufacturer of industrial gears, pumps and transmission systems.

Dutch packaging and distribution group KNP BT, has agreed to sell its packaging division to UK venture capital groups CVC and Cinven. The deal is worth Fls 3.4 billion ($ 1.7 billion).

Paris-based company Framatome Connectors is to buy Berg Electronics Corporation of the US for $1.85 billion. The deal will make Framatome the world's second-largest manufacturer of electronic connectors. Framatome will pay $35 a share for Berg's shares, and will assume $400 million of debt.