Ernst & Young today announces that its Global Executive and the Global Advisory Council approved the proposed integration of all of its 87 country practices in Western and Eastern Europe, the Middle East, India and Africa into a new EMEIA Area. It also confirmed that more than 700 partners in the Far East had supported a similar integration across 15 countries and territories.

The EMEIA Area will operate as a single unit, led by a single executive team and, where allowed by laws and regulations, be underscored by formal combinations of practices. The new Area will be a US$11.2 billion organization with more than 60,000 people. The 3,300 partners of EMEIA will vote on the integration by the end of May. The new EMEIA Area will be effective from 1 July 2008.

The integration of the Far East Area creates a US$1.2 billion organization, with more than 20,000 people. The new structure will also be effective from 1 July 2008.

Mark Otty, currently the head of our UK practice, has been nominated to be the EMEIA Area Managing Partner, while David Sun and Jim Hassett were confirmed as Far East co-Area Managing Partners.

Ernst & Young smoothes out crunch-time bumps for Canadian tax professionals with an updated version of their annual tome on personal tax returns: Ernst & Young’s Guide to Preparing 2007 Personal Tax Returns. This year’s edition is filled with updates on new rules and hot topics, including:

• pension income splitting
• eliminating capital gains on gifts of public company shares to private foundations
• RESP rule changes
• increased capital gain deduction limits for small business shares and farming/fishing property

“This is such a busy time of year,” notes Gena Katz, tax executive director at Ernst & Young. “This guide saves you time by collecting the newest updates and comprehensive guidelines in one easy-to-use resource.” Ernst & Young’s Guide to Preparing 2007 Personal Tax Returns is published by the Canadian Institute of Chartered Accountants each year. The guide is available in both print and online editions. The print edition includes a reference CD that contains a searchable version of the book, along with all referenced source materials. The Internet edition reproduces all materials in the print edition and links to more than 50,000 cross-referenced documents, thousands of CRA rulings and cases, legislative references and Department of Finance explanatory notes.

To order a copy of Ernst & Young’s Guide to Preparing 2007 Personal Tax Returns, go to knotia.ca/store/07t1eypr

Chris Sanger, Ernst & Young’s Head of Tax Policy expects the following to be included in the Budget:

• The new 18% flat rate of capital gains tax will be once again confirmed together with details of the entrepreneur’s relief. The changes for taxpayers who are resident in the UK but not domiciled here will be clarified to reassure those who are considering leaving the UK as a result of the proposals.
• The rate of income tax has been fixed by his predecessor but national insurance contributions are still up for grabs by the new Chancellor.
• The Chancellor is expected to introduce measures, perhaps a change in the rate of relief, to minimise the impact that the reduction in the basic rate of income tax has had on the tax relief received by charities.
• Joint taxation of spouses was abolished in 1990 and, while this is unlikely to ever be reintroduced, are we starting to see signs that the tax system is being used to create a family unit for tax purposes. We only have to look at the tax credits regime which is based on the concept of family income to see the beginnings of a shift of approach.Next, the Government has indicated its intention to act to tackle what it calls income shifting, in other words, the arrangement of affairs so that one spouse’s income is diverted to another in order to gain a tax advantage from their lower tax rate. A consultation finished on 28 February 2008 and further details are expected in the Budget although it remains difficult to see how the proposals will work in practice.Finally, the Chancellor will take another opportunity to outline the details of the transfer between spouses of the inheritance tax exemption. Is this the final step towards taxation of the family unit or can we expect to see more developments on 12 March?
• The changes to the trust rules come into effect from April but a number of uncertainties remain. Most forms of trust are affected by the new rules but many taxpayers are unaware. The changes make planning families’ wealth much more difficult which does not fit with the Chancellor’s simplicity objective and may prompt him to amend some of the key changes.
• Green taxes are sure to be on the agenda with either further measures to encourage householders to implement green strategies or showroom taxes to discourage the purchase of cars with high emissions
• With the credit crunch really starting to bite now, the Chancellor should consider measures to encourage saving like the extension and simplification of ISAs.
• Finally, if the Chancellor really wants to cement his position as the man in control of the Treasury, reforming the antiquated stamp duty land tax regime from a slab to a graduated system would be a great place to start and would bring a fresh approach to the housing market. Chris concludes “It’s going to take something big for the Chancellor to change the first impressions of UK taxpayers but with the current economic climate, this may be difficult. The Chancellor made a good start with his commitment to competitiveness, fairness and simplicity and we now need to see some evidence of this in practice.”

International Tax Talk with Ernst &Young’s Foreign Tax Desks:
Date: Tuesday, February 12, 2008
Time: 1:00 p.m. - 2:15 ET New York
Registration: Register for this Webcast at
http://webcast.ey.com/thoughtcenter/default.aspx?pid=937

Many multinational corporations find it a challenge to keep up with frequent changes in the global tax legislative and regulatory environment. To help address this challenge, Ernst & Young LLP cordially invites you to join this Thought Center Webcast. Each installment of this quarterly series provides you with information on major tax law changes in the countries and jurisdictions covered by their U.S.-based Foreign Tax Desks.

In this installment, they will discuss:

-Challenges and opportunities in Italian tax reform
-Important developments in India
-Anti-base erosion rules
-Branch transactions and section 987

During this interactive webcast, you will have the opportunity to ask questions through the website and the Foreign Desks will answer as many of your questions as time permits.

This program will be of interest to VPs Tax, Directors of Tax/International Tax, International Tax Managers and Tax Accountants looking for the latest practical information and planning ideas to support their global business initiatives.

Featured Panelists:
Sanjay Chakrabarti, Ernst & Young LLP, Indian Tax Desk
David Golden, Ernst & Young LLP, International Tax Services, Capital Markets
Andrea Lovisatti, Ernst & Young LLP, Italian Tax Desk
Sebastiano Marinozzi, Ernst & Young LLP, Italian Tax Desk
Roderik Rademakers, Ernst & Young LLP, Dutch Tax Desk

Moderator
Marco Groen, Ernst & Young LLP, Eastern European Business Group

You can register for any webcast in three easy steps:

1. Go to the Thought Center Webcast site:
http://www.ey.com/webcast and click “Upcoming Webcasts” on the right side of the page to select the program for which you would like to register.
2. Click the “Register” button, enter your e-mail address, and complete the simple registration form.
3. After you have completed the registration form, follow the instructions to test your system for the webcast technology.

This report from Ernst & Young covers 850 MNEs in 24 countries, and summarizes their transfer pricing practices, perceptions, and audit experiences, and provides insight into how they are dealing with the economic, regulatory, and fiscal changes taking place around the world.Since 1995, Ernst & Young has surveyed MNEs on international tax matters. The scope of our biennial transfer pricing research reflects the growing number of countries that devote attention to transfer pricing through increased enforcement and regulatory activities, as well as the diversity of transfer pricing issues facing MNEs.

Download the “2007-2008 Global Transfer Pricing Survey: Global Transfer Pricing Trends, Practices and Analyses” (pdf, 1.2mb) for findings from each country, compared with regional and global results. Also read analysis of issues including documentation and controversy risk management practices, convergence of customs and transfer pricing, the impact of financial reporting requirements, and audit experiences, as well as insight into industry sectors.

Key findings from the report include:

• Forty percent of all respondents identified transfer pricing as their most important tax issue
• Over half (52%) of all respondents have undergone a transfer pricing examination since 2003, with 27% resulting in adjustments by tax authorities
• Eighty-seven percent of all respondents consider transfer pricing a risk issue in relation to managing financial statement risk
• Sixty-five percent of respondents from parent MNEs believe transfer pricing documentation is more important today than two years ago. But only one-third of MNEs prepare transfer pricing documentation on a concurrent, globally coordinated basis.

Ernst & Young has announced the admission of 4 new partners to the UK tax practice, which took effect this month. Graham Farquhar (Employer Services), Kevin MacAuley (VAT Indirect Tax) and Matt Maltz (Real Estate) are based in London whilst Giles Capon (Human Capital) is from the Bristol office.Paul Davies, UK Head of Tax, said, “We are very committed to attracting, retaining and developing talented people and I am delighted to announce the appointment of our new tax partners. It is always a pleasure to recognise and reward the achievements of individuals. As a firm, we have great confidence in our people and their ability to offer our clients deep sector knowledge and expertise while providing a high quality service.”

Giles Capon joined Ernst & Young in 2002 as a senior manager, having previously worked for BDO Binder Hamlyn, Coopers & Lybrand and most recently Andersen. Starting his career with the firm focusing on share plans, Mr Capon later diversified to help employers with three key areas of their human capital needs - global mobility, performance and reward, and employment tax consulting services.

Graham Farquhar joined the firm three years ago and leads the Employer Services team within Tax and Risk Advisory Services (TARAS). Graham focuses on advising clients on all aspects of employment tax issues and specialises in HMRC investigations. Graham has extensive experience in Financial Services and the technology sector.

Kevin MacAuley, who leads Indirect Tax Accountancy Risk Advisory Services (ITARAS) and the London VAT Group, joined Ernst & Young ten years ago. He helps clients improve their performance and manage risks associated with operational VAT issues.

Matt Maltz joined the Real Estate, Hospitality and Construction (RHC) team in 2001 following four years at Andersen and two at Barclays Capital. He focuses on real estate tax planning and big ticket cross border transactions for major corporates, institutional investors and real estate funds.

Ernst & Young has announced the admission of 17 new partners to the UK firm with immediate effect taking the total number of partners admitted over the last six months to 29.The appointments are across the firm in all service lines and industry sectors as well as up and down the UK.

Mark Otty, Chairman of Ernst & Young in the UK and Managing Partner Northern Europe Middle East, India and Africa (NEMIA), said:

“We are very confident in the future growth prospects of our firm: Ernst & Young in the UK has grown by nearly 50% in the last three years and across the NEMIA area growth has been exceptional with India, South Africa and the Middle East increasing revenues by more than 40% in 2007 alone.

“Our global strategy of twinning more mature markets with emerging ones and our unique NEMIA operating model are widely acknowledged as a powerful approach and have cemented our reputation for providing exceptional services to clients.

“Ernst & Young in the UK is differentiating itself in the market place through our distinctive values campaign which has received a favourable response from our people, our clients and other stakeholders. We have recruited record numbers of staff at all levels and are committed to continued investment in new partners to drive our business forward.

“Not only do we have the most international and diverse leadership of any major professional services firm in the UK but we have the highest number of female partners amongst the top six firms.

“As well as promoting from within we have also made a major investment in direct entry partners. The firm has built itself a deserved reputation for not only promoting quality candidates internally but attracting the brightest and the best from the external market place. We expect to make plenty more of these appointments throughout 2008.”

Partner admissions:

Adrian Nicholls
Alex Gaunt
Andy Bates
Annie Graham
Clive Martin
David Scourfield
Graham Farquhar
Giles Capon
Ian Scott
Kevin McAuley
Mark Wesley
Matt Maltz
Matthew Evans
Pamela Spence
Stuart Gregory
Taylor Dewar
Tom Lukic