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Lynne Clare, strategic VAT director at Sony, talks to Joanna Faith about the importance of indirect taxes as corporates gear up for the new EU VAT package.

The recession has helped thrust indirect taxes into the spotlight. Often referred to as invisible taxes, indirect taxes are now a focal point for tax authorities seeking to claw back much needed revenue. As company profits remain low, Treasuries can no longer rely on direct tax revenue to plug expanding deficit holes. As a result indirect taxes have reached the attention of not just tax directors but chief financial officers and senior management. Once, they were just considered a compliance issue, now taxpayers realise the benefits of well managed indirect tax processes. In struggling economic times, how much a taxpayer owes to various revenue authorities becomes critical. The usual concerns surrounding transactions and inventive planning take a back seat. Though many countries may technically be coming out of recession, the after effects of the worst economic crisis since the Second World War will be felt for a long time to come. Well-managed indirect tax processes will help weather the storm but also put companies is a better position for the future.

Free movement of capital – Profits distributed to a parent company exempt from withholding tax in the member state of the subsidiary – Concept of ‘company of a member state’ – ‘Societe par actions simplifiee’ under French law.

Failure of a member state to fulfil obligations Directive 2005/60/EC Prevention of the use of the financial system for the purpose of money laundering and terrorist financing Failure to transpose completely Failure to communicate the measures to transpose the directive.

Europe's leading international tax advisers and their clients last night gathered at the Dorchester Hotel in London for International Tax Review's fifth annual European Tax Awards.

Stephen Nelson Aiming to support small and medium-sized enterprises to survive the global financial crisis, the Ministry of Industry and Information Technology and the State Administration of Taxation jointly issued the notice on business tax exemption for small and medium-sized enterprise credit guarantee institutions (Gong Xin Bu Lian Qi Ye [2009] number 114) on March 31 2009.

Sean Foley The IRS rece-ntly posted interim guidance on its website clarifying the meaning of the term commen-cement date for purposes of the mandatory arbitration process in mutual agreement procedure (MAP) cases under the US-Belgium income tax treaty. The interim guidance was generally welcomed by taxpayers because, pending publication of more formal procedures, the interim guidance could prevent unnecessary delays in resolving MAP cases under consideration by the US and Belgium competent authorities.

Rikard Ström Weronica Sjöberg On March 11 2009, the supreme administrative court issued judgments in 10 cases regarding the Swedish group contribution system, which is the Swedish method of group relief, and its compatibility with the EC treaty with respect to losses in group entities within the EEA.

After years of negotiation, the European Council has finally reached a political agreement on the changes proposed in the VAT package. The aim of this VAT package is to minimise the administrative burden for companies engaged in cross border trade, to ensure that VAT on services accrues to the country where consumption occurs and to prevent distortions of competition between member states operating different VAT rates.

Niklaus Honauer The popular vote on the VAT rate increase will definitely take place on September 27 2009. The rates are to be increased as follows: