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Right of establishment — Corporation tax — Surrender by one company to another company in the same group of tax relief on trading losses — Residence requirement imposed on group companies — Discrimination according to the place of the corporate seat— Obligations of the national court.

Dutch supermarkets business Ahold has made a $2.7 billion bid for Giant Food, a US supermarket chain. The deal will expand Ahold's US presence to over 1,000 stores. Ahold will acquire the group from shareholders, including US holding company 1224 Group and UK-based company J Sainsbury USA Holdings.

Pearson, the UK-based media group, has agreed to acquire publishing company Simon & Schuster from US group Viacom. The deal is valued at £2.75 billion ($4.6 billion). Following the purchase, Pearson will sell certain parts of Simon & Schuster to US leveraged buy-out company Hicks, Muse, Tate & Furst.

In the case of qualifying pension plans, the contribution of the employer under the scheme is not taxable, whereas the contribution of the employee is tax deductible. Benefits received from a qualifying plan are in general fully subject to Netherlands income tax. Special rules provide for taxation over the economic value of an employee's pension rights in case of certain "forbidden" transactions.

Artemis of France is to buy UK auction house Christies for £721 million ($1.1 billion).

In March of this year, the German Parliament and Federal Council ratified two major pieces of legislation which have since taken effect. The Law on Corporate Control and Transparency makes extensive changes to the provisions of the Stock Corporation Act (Aktiengesetz) to improve corporate accountability. This bill also liberalizes the provisions relating to the issuance of stock options to senior executives and other employees. Some of the new provisions may be applicable by analogy to limited liability companies. Most provisions either take immediate effect or apply to fiscal years beginning 1999 onwards.

Piergiorgio Valente of Studio Associato Legale Tributario (Ernst & Young) gives an overview of the key principles behind administrative tax penalties in the jurisdictions of Italy, Sweden, the UK, France and Germany

The Korean government’s new warmth towards foreign investors has created M&A opportunities. Potential tax structures are analyzed by Todd M Landau, Yong-Kyun Kim and Robin Voigt of PricewaterhouseCoopers, New York, Seoul and Chicago

New Zealand’s Inland Revenue is tightening up on the accuracy with which taxpayers value income from trading stock. Andrew Button of Deloitte Touche Tohmatsu, Auckland, alerts readers to the consequences

The IRS has updated its definition of financial products, extending a safe harbour for securities and commodities to derivatives. Linda Carlisle and Daniel Gilroy of White & Case, Washington DC, report on regulations which could lead to a boom in hedge funds