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The series of demonstrations in November against Vodafone's alleged £6 billion ($9.5 billion) tax avoidance represent the first public protest about corporate tax in the UK.

A monthly commentary on the notable facts, figures and goings-on in the tax world. Suitable items should be sent to taxrelief@euromoneyplc.com

Vladimir Kotenko Businesses already take for granted the poor tax and legal environment in Ukraine. Now, however, the situation is reaching its boiling point due to openly arbitrary behaviour on the part of state agencies.

Zeki Gündüz As it is known, transfer pricing legislation in Turkey has been one of the most focused tax legislations since its first enactment in 2007. During the past three years, unsurprisingly there have been long debates about various topics, which had/still also discussed by most of the European countries that have enacted transfer pricing long before.

Sean Foley Landon McGrew The Internal Revenue Service (IRS) recently issued a new revenue procedure (Revenue Procedure 2010-32) providing welcome guidance with respect to certain erroneous foreign entity check-the-box elections. The IRS issued the revenue procedure to alleviate taxpayer concerns about the validity of elections by foreign entities that incorrectly chose to be classified as partnerships or disregarded entities because of uncertainty regarding the number of owners of the foreign entity on the effective date of the election.

José Vicente Iglesias The traditional inspection and supervision model that the tax authorities employ for large taxpayers has recently shown signs of wear. Against this backdrop, in 2002, the Committee on Fiscal Affairs of the OECD started up the Forum on Tax Administration with the aim to develop effective responses to the issues faced by tax authorities and promote a constructive dialog on the issues arising in the short and long term.

Slobodan Mihajlovic International investors have two options when deciding how to finance their investments in subsidiary companies. These options regard to a decision on whether to introduce funds by way of capital injection or through debt. Financing a subsidiary through debt is a more tax wise solution as interest is tax deductible (decreasing corporate tax) therefore the tax leakage is minimised, whereas dividends will be non-deductible distribution of profits. Thin capitalisation is when there is an excessive ratio of debt to equity such as when the capital of the company is comprised of greater debt than equity. This practice creates a high risk due to the fact that the said debt has to be repaid to the creditors even though the capital reserves are not enough for such repayment.

In a legislative proposal announced on October 5 2010 the Norwegian government proposed changes to the VAT Act making suppliers not established in Norway obligated to charge VAT when supplying electronic services to Norwegian consumers (B2C). Today, only suppliers established in Norway must charge VAT when such services are supplied to Norwegian consumers. The proposal will lead to equal terms for suppliers established within and outside Norway respectively, supplying electronic services to Norwegian consumers.

Sead Dado Salkovic Many foreign companies are indirectly present in Montenegrin markets by using various services of resident agent/brokerage companies. Over the past couple of years Montenegro has become an alluring investment destination due to ease of doing business in different areas. Certainly the most attractive sectors are the real-estate, Internet and services concerning tourism.

David Cuellar Salvador Esquivel The Mexican Congress has been actively working on the proposed 2011 tax bills, which include a new incentive for income tax purposes, among other changes. The incentive is intended to encourage employers who hire non-experienced workers for newly created positions (incentive to first-employment).