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Brazil does not adhere to the arm's-length principle but that does not mean taxpayers can take their transfer pricing obligations lightly, warn Simone Dias Musa and Clarissa Machado

As in previous years, transfer pricing has remained one of the most important tax issues for both tax authorities and corporations. It has been used as an effective tool for governments to protect their tax base when multinational enterprises carry out cross-border transactions, as well as a key management issue for companies since adjustments determined by tax authorities, coupled with potential penalties and double taxation implications, affect their financial performance and impose a global tax burden.Most of the transfer pricing regimes worldwide and in Latin America are based on the arm's-length principle, which seeks to eliminate tax advantages between related companies by requiring the use of prices or amounts that would have been used by unrelated parties in comparable transactions. The adoption of these rules is intended to leave a fair taxable basis according to a company's functions, risks and assets. As discussed last year, and since tax authorities are entitled to perform primary adjustments to enforce the arm's-length principle in their jurisdictions, double taxation arises for companies in those countries that have a limited network of double tax agreements (that is, Colombia, Peru and Uruguay). Ultimately, negotiating a corresponding adjustment with countries that do not have treaties in place becomes unfeasible, and even when there is a double tax treaty, local rules do not specifically provide for the elimination of surcharges or interest on unpaid amounts.

The Argentine tax authorities have modernised their approach to transfer pricing in recent years, explain Augusto Martin Camarero and Armando Cabrera

Suzanne Boers In June the Dutch ministry of finance published a consultation document with a number of possible amendments to the Dutch Corporate Income Tax Act. With this, the Dutch government invited the public to submit comments and observations. The government is planning to submit a tax bill to the parliament this autumn, in which the final legislative proposals will be included. According to the consultation document, the amendments should enter into force as of January 1 2010.

Thomas Pippos In June New Zealand and Australia signed a new double tax agreement (DTA) which is the culmination of more than a year's negotiations between the two countries.

David Cuellar Salvador Esquivel In the first half of 2009, the Mexican tax authorities issued annexes 16 and 16-A of the Tax Miscell-aneous Rules, which contain the instructions for the integration, characteristics and the guideline forms to file the statutory tax audit report and the questionnaires related to the public accountant's review, for the 2008 tax year.

Gary Gowrea In July 2009, the Supreme Court of Mauritius (court) had to decide on the constitutionality of section 131A(2)(b) of the Income Tax Act 1995 (Act), in relation to the payment of 30% of the amount of income tax claimed as a monetary pre-condition imposed on the taxpayer wishing to appeal against the notice of assessment drawn up by the Mauritius Revenue Authority. Such an assessment is made whereby the director-general is of the opinion that the return submitted by the taxpayer fails to comply with the Act or that there is reason to believe that there is tax evasion. On receipt of a notice of assessment, the taxpayer may object to the assessment and appeal to the director-general.

Shane Hogan Gerry Thornton On July 28 2009, Ireland signed a tax information exchange agreement with Bermuda. This agreement will allow the Irish tax authorities to request information which is relevant to an Irish tax investigation directly from the Bermudan tax authorities (and vice versa).

Nicolas Jacquot Following a request by French president Nicolas Sarkozy to examine the idea of a national carbon tax, a panel led by ex-prime minister Michel Rocard issued its report on July 28 recommending that France introduce a national carbon tax in 2010. Although many questions are yet to be resolved, the political will for its implementation is serious.

Oscar Teunissen, Joni Geuther, Daniel Lobatto and Laura Parello of PricewaterhouseCoopers in the US explore the tax considerations that pension and endowment fund managers and investors should be aware of when investing in US and foreign markets.