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The final part of ITR’s survey brings together traditional and emerging oil and gas locations. By Mark Campbell, Mike Kubena and Varinder Matharu of PricewaterhouseCoopers, Baku and Moscow, and Michael Thompson of Freshfields, London

The European Commission has ruled out the establishment of a new tax on electronic commerce. Instead, the Commission wants to adapt existing taxes, particularly value-added tax (VAT), to transactions that take place via electronic systems such as the Internet. In a new set of guidelines on the taxation of electronic commerce, the Commission outlines four key principles:

The Indian government unveiled its 1998 budget on June 1. Although there was no cut in corporate income tax, there were a number of significant proposals: customs duties were increased by 4%. An 8% rise was originally planned but this was reduced following pressure from businesses; expenditure on intangible assets will not be eligible for a tax deduction; a scheme was introduced to reduce tax litigation. Companies that have litigation pending will be given the option to pay a flat rate of 35% on the disputed income. Companies that pay the sum will not have to pay penalties or interest for delaying payment. The scheme will operate between September 1 and December 31 1998; the government will clear all foreign direct investment proposals within 90 days. Proposals exceeding Rs1 billion ($23 million) will be specially monitored for rapid clearance.

The US Treasury has been forced to withdraw a controversial measure designed to close down tax planning opportunities exploited by multinationals. Internal Revenue Service Notice 98-35 withdraws Notice 98-11 and announces modifications to the rules on hybrid entities.

Does an annual tax on company assets, which is said to have effects which are economically equivalent to a capital duty, fall within the scope of Council Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital, in so far as it takes account of the amount of a company's subscribed capital?

Council Directive 69/335/EEC of 17 July 1969 – indirect taxes on the raising of capital – imposition of an ad valorem duty on the issue of the document recording the repayment of a loan – interpretation – does the prohibition of taxes on loan documentation cover those concerning repayment?

Hambros, the UK investment bank has accepted a £428 million ($685 million) bid from Investec, the South African financial services group. Investec will take Hambros' stake in two fund management companies, a private equity business, a varied collection of investment stakes and more than £200 million in cash. The deal sets up a fight for Guinness Flight Hambro, the fund management company. Investec wants to buy the company but Hambros' management is reluctant to sell.

US communications group SBC Communications has agreed to a $57 billion merger with Chicago telephone group Ameritech. The stock acquisition of Ameritech will increase SBC's market share in 13 states.

Robeco Groep of the Netherlands is to acquire the New York investment house Weiss Peck & Greer for $575 million.

Vickers, the UK-based defence group, is considering rival bids from German car manufacturers for its Rolls Royce Motor Cars business. BMW appeared to have secured the deal with a £340 million ($554 million) bid in April this year. However, the bid was topped in May when Volkswagen offered £430 million for the business. Vickers recommended the Volkswagen bid to shareholders.