KPMG’s Week in Tax: 26 February - 2 March 2018 | KPMG | LU
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KPMG’s Week in Tax: 26 February - 2 March 2018

KPMG’s Week in Tax: 26 February - 2 March 2018

Tax developments or tax-related items reported this week include the following.

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Transfer Pricing BEPS

  • Singapore: Recent transfer pricing guidelines or measures include the arm’s length standard, rules allowing transfer pricing adjustments, and the introduction of transfer pricing documentation rules.
  • India: The tax authority announced the conclusion of two advance pricing agreements (APAs) on the treatment of advertising, marketing, and promotion expenses.
  • Kazakhstan: New measures establish rules for filing with the tax authorities certain transfer pricing documentation—including a Local file, a Master file, and a country-by-country (CbC) report.
  • Lithuania: A draft order includes measures to amend the rules for “controlled transactions”—i.e., transfer pricing rules. 

Read TaxNewsFlash-Transfer Pricing

Europe

  • Ireland: New legislative provisions allow for an employee share option scheme designed to help small and medium enterprises to attract and retain key personnel in a tax efficient manner.
  • Ireland: A report summarizes VAT updates in Ireland and the EU.
  • Netherlands: The government’s future tax plans were explained in two letters by the Deputy Minister of Finance. One letter contained a tax policy agenda, and the other elaborated on the first priority of this agenda—addressing tax avoidance and tax evasion.
  • San Marino: A report examines changes to corporate and tax law over the past few years, as well as a number of tax information exchange agreements and income tax treaties.
  • Romania: New instructions have been provided for completing and submitting environmental fund declarations electronically.

Read TaxNewsFlash-Europe

Africa

  • South Africa: Given the increase in the rate of value added tax (VAT) to 15% effective 1 April 2018, there are actions that taxpayers need to consider now.
  • South Africa: There are transition rules with respect to the VAT rate increase (effective 1 April 2018) as applied to sales of fixed property.
  • South Africa: Several changes to the income tax returns for trusts (ITR12T) will be implemented with respect of the assessment year ending 28 February 2017. If a 2017 return was submitted prior to implementation of these changes, none of the new fields will be required for completion.
  • Nigeria: In general, the 2018 budget does not propose changes to the income tax rates and does not impose new taxes in 2018, aside from a possible increase from 5% to 15% of the rate of VAT on luxury goods.

Read TaxNewsFlash-Africa

Americas

  • Canada: The 2018 federal budget includes new private company taxation and passive investment income rules. It does not propose changes to the corporate income tax or individual (personal) income tax rates.

Read TaxNewsFlash-Americas

Asia Pacific

  • Hong Kong: The 2018-2019 budget proposes a regional headquarters tax regime, extension of the scope of the profits tax exemption on debt securities, and a reduction in the salaries tax on individual taxpayers by 75%.
  • Bangladesh: A new VAT law has been postponed to July 2019. There are corporate tax changes for certain industrial sectors.
  • Egypt: Tax incentives are provided under a new law that aims to encourage investments.
  • Gulf Cooperation Council (GCC): VAT measures in Saudi Arabia, UAE, Qatar, and Kuwait include guidance for filing returns. The VAT regime in Oman has been postponed to 2019. A new excise tax regime applies in Bahrain.
  • Oman: Court decisions concern finance leases and carryforward of tax losses during exemption period with respect to the energy sector. A new withholding tax regime applies for dividends, interest, and payments for services from foreign suppliers.
  • Sri Lanka: The new tax law is effective 1 April 2018, and includes VAT and “nation building tax” measures.
  • United Arab Emirates: A tax treaty with Saudi Arabia would be the first agreement between GCC countries to address double taxation issues.
  • Thailand: The Thai government launched a national “e-payment” system that aims to increase efficiency for electronic invoices (and related withholding tax).
  • Australia: A new cost recovery model has been proposed that would affect the treatment of “low-value” imported goods.
  • Australia: Taxpayers need to consider planning and action steps as the end of the 2018 fringe benefits tax year approaches (April 2018).

Read TaxNewsFlash-Asia Pacific

FATCA / IGA / CRS

  • United States: New “frequently asked questions” (FAQs) concern certifications and periodic reviews regarding qualifying intermediaries / withholding foreign partnerships / withholding foreign trusts (QI/WP/WT) information.
  • Hong Kong: A reminder was issued that the deadline for submitting FATCA compliance certifications to the IRS is 1 July 2018.

Read TaxNewsFlash-FATCA / IGA / CRS

Trade & Customs

  • A report describes the sixth round of NAFTA negotiations that concluded in January.

Read TaxNewsFlash-Trade & Customs

United States

  • Notice 2018-18 states future regulations under the new "carried interest" provision of the Code will clarify that for purposes of one of the exceptions under section 1061, the term "applicable partnership interest" does not include a partnership interest held by an S corporation.
  • The IRS released a new version of Form W-4 and an updated “withholding calculator” to help individual taxpayers verify their 2018 tax withholding following enactment of the new tax law (Pub. L. No. 115-97) in December 2017.
  • Notice 2018-19 extends relief previously provided to individuals who, because of the continued dislocation caused by Hurricane Irma and Hurricane Maria, may otherwise lose their status as “bona fide resident” of Puerto Rico or the U.S. Virgin Islands. 
  • Revised information was released about census tracts that are eligible for nomination as “qualified opportunity zones” (QOZs).
  • A hearing officer in New Mexico concluded that a taxpayer’s claim for refund was barred by the statute of limitations, noting that the taxpayer had not filed a timely amended return as a valid refund claim. Specifically, it was found the taxpayer’s correspondence with the Department of Revenue regarding the overpayment of taxes did not satisfy the legal elements necessary to establish a claim for refund.
  • The Pennsylvania Board of Finance and Revenue ruled that sales tax was properly assessed on fees charged by online marketplaces because they were characterized as fees for debt-collection services.
  • The Texas Comptroller of Public Accounts determined that an oil and gas company was eligible to claim a sales tax exemption for intercorporate services provided by affiliated entities. 
  • In West Virginia, federal corporate income tax conformity legislation (House Bill 4135) that neither specifically addresses nor decouples from federal tax reform changes, has been enacted.

Read TaxNewsFlash-United States

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