KPMG’s Week in Tax: 28 May - 1 June 2018 | KPMG | LU
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KPMG’s Week in Tax: 28 May - 1 June 2018

KPMG’s Week in Tax: 28 May - 1 June 2018

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

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Americas

  • Uruguay: The government issued a decree that concerns the tax treatment of the digital economy. These measures will affect multinational corporations operating in the digital economy space or providing digital economy services in Uruguay.

Read TaxNewsFlash-Americas

Europe

  • Malta: Two or more legal persons, at least one of which operates within the financial or gaming sectors, may opt to be treated as a single taxable person for value added tax (VAT) purposes. The “VAT grouping” regime is effective 1 June 2018.

Read TaxNewsFlash-Europe

Asia Pacific

  • Australia: A goods and services tax (GST) withholding obligation will be imposed on purchasers of certain residential premises, including certain vacant land, beginning 1 July 2018.
  • Australia: The 2018-2019 Northern Territory budget introduced a payroll tax exemption for hiring resident employees for wages paid, beginning 1 May 2018.
  • Australia: The government introduced a bill that addresses hybrid mismatch arrangements and interposed entity financing transactions through low or no tax jurisdictions.
  • India: A tribunal addressed the taxability of a gift of shares to a sister concern under a family realignment “without consideration.” 
  • India: The rate of interest is 8.55% for crediting interest on provident fund accumulation for members of the Employees’ Provident Funds Scheme for the financial year 2017-18.
  • India: A tribunal held that once a research and development (R&D) facility has been approved by the Department of Industrial and Scientific Research (DSIR), the deduction could not be denied. 
  • India: The Delhi High Court addressed the taxability of payments under technical support and crew-lease agreements under the India-Germany income tax treaty, absent a permanent establishment in India. 
  • India: A tribunal held that an Indian company with whom the taxpayer entered into a franchise agreement did not constitute a dependent agent permanent establishment (PE) of the taxpayer in India under the India-United States income tax treaty. The Indian company had no authority to maintain its stock or goods or merchandise on behalf of the taxpayer, and no activities were conducted by the Indian company on behalf of the taxpayer; hence, it was not a PE.

Read TaxNewsFlash-Asia Pacific

FATCA / IGA / CRS

  • South Africa: A reminder was issued that the deadline for the “third-party data annual submissions” process for the period 1 March 2017 through 28 February 2018 was 31 May 2018.
  • Bulgaria: The tax authority issued an updated version of automatic exchange of financial information (AEOI) instructions.
  • Ireland: Three new “tax and duty manuals” related to the automatic exchange of information (AEOI). The three new manuals are similar to prior guidance notes on the FATCA and CRS regimes.
  • Cayman Islands: A reminder provides the statutory reporting deadline under the FATCA and the CRS regimes was 31 May 2018.
  • Liechtenstein: An updated version of the CRS reporting instructions was issued as guidance for financial institutions.
  • Pakistan: The reporting deadline for submissions of the CRS returns for reporting year 2017 was extended to 30 June 2018 (from 31 May 2018).
  • Bermuda: New regulations amend the CRS rules. The new measures require the filing of “nil” returns for financial institutions that have no reportable accounts.
  • Channel Islands: The tax authority in Guernsey announced the reporting deadline for filing FATCA and CRS returns with respect to reporting year 2017 is 30 June 2018.
  • China: CRS returns were to be submitted by 31 May 2018.
  • United States: A draft version of the form to be used for FATCA registration was posted. 
  • United States: The next testing phase for the FATCA International Data Exchange Service (IDES) was set from 18 June 2018 to 27 July 2018.

Read TaxNewsFlash-FATCA / IGA / CRS

Trade & Customs

  • United States: Tariffs on steel and aluminum imports from Canada, Mexico and the European Union were announced to be effective beginning 1 June 2018.
  • Canada: The government announced actions to prevent the transshipment and diversion of foreign steel and aluminum into the North American market. 
  • EU: The European Commission issued a release stating that the EU will launch legal proceedings against the United States in the World Trade Organization (WTO) following the announcement that the United States will impose additional customs duties of 25% and 10% on imports of steel and aluminum from the EU beginning 1 June 2018.
  • China: The Customs Tariff Commission announced reduced import tariffs on automobiles and automotive parts.
  • United States: The U.S. Senate Finance Committee issued a release concerning efforts to address counterfeit goods and to curtail the illegal sale of counterfeits through e-commerce sites.
  • United States: The White House announced that the United States will impose a 25% tariff on $50 billion of certain goods imported from China.

Read TaxNewsFlash-Trade & Customs

United States

  • Proposed regulations address the rules for when information returns must be filed using magnetic media (electronically). 
  • Rev. Rul. 2018-17 addresses the withholding and reporting requirements with respect to payments made from IRAs (individual retirement accounts) to a state’s unclaimed property funds, and the IRS ruled that payments made by a trustee of an individual’s IRA to a state’s unclaimed property fund are subject to federal income tax withholding and reporting.

Read TaxNewsFlash-United States

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