KPMG’s Week in Tax: 22 - 26 October 2018 | KPMG | LU
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KPMG’s Week in Tax: 22 - 26 October 2018

KPMG’s Week in Tax: 22 - 26 October 2018

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

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Transfer Pricing and BEPS

  • Argentina: The tax authorities (AFIP) released information about country-by-country (CbC) reporting, and it appears that Argentine domestic subsidiaries of U.S. multinational entities for 2017 will apparently have reporting obligations in Argentina.
  • Costa Rica: The tax administration proposed to modify guidelines relating to entities required to file a country-by-country (CbC) report.

Read TaxNewsFlash

Africa

  • Nigeria: A voluntary disclosure regime is intended to regularize offshore assets, and applies to all persons, entities, and their intermediaries holding offshore assets and who are in default of their tax liabilities.

Read TaxNewsFlash-Africa

Americas

  • Brazil: The presidential run-off election scheduled for this weekend may have implications for tax.
  • Canada: Residential property owners may benefit from new relief available in draft legislation to enact the British Columbia real estate tax (first proposed in the 2018 provincial budget). 
  • Canada: Draft legislation providing an employer health tax would apply to permanent establishments in British Columbia with employees and to charitable and non-profit employers. The tax is proposed to be effective 1 January 2019.

Read TaxNewsFlash-Americas

Asia Pacific

  • China: Draft rules for implementing individual income tax measures include provisions relating to the domicile of foreign individuals and of Chinese persons; itemized deductions for foreign employees; definitions of the terms related-party transaction and controlled foreign corporation when involving high net-worth individuals; deemed disposals on foreign immigration of Chinese taxpayers; and adequate documentation of items claimed as itemized deductions.
  • Taiwan: Revisions to the law governing companies in Taiwan were passed by the Legislative Yuan earlier this year.

Read TaxNewsFlash-Asia Pacific

Europe

  • Serbia: Measures approved by the parliament have implications for the Central European Free Trade Agreement.
  • Malta: Tax provisions in the 2019 budget include personal tax, VAT, international tax, and private pensions.
  • UK: The Court of Justice of the European Union (CJEU) issued a judgment concerning a hire-purchase agreement, and concluding that the supply of a vehicle and the supply of credit can be treated as separate supplies for VAT purposes.

Read TaxNewsFlash-Europe

FATCA / IGA / CRS

  • Russia: A list of “frequently asked questions” (FAQs) concerns, in part, the rules for implementing the common reporting standard (CRS).
  • Australia: An update relating to FATCA reporting contains additional information under sections about the Australian Business Number, Sponsor GIIN, and Trustee Documented Trust.
  • United States: The IRS updated a list of FAQs as part of the guidance for qualified intermediaries / withholding foreign partnerships / withholding foreign trusts (QI/WP/WT) under the FATCA regime.
  • OECD: The Organisation for Economic Cooperation and Development (OECD) announced an updated list of “residence by investment and citizenship by investment” (RBI/CBI) schemes that some taxpayers may be attempting to use to circumvent the CRS rules.

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • The IRS added another two North Carolina counties—Bertie and Davidson counties—to the existing list of counties for purposes of identifying areas where tax relief may be available for certain taxpayers affected by Hurricane Florence.
  • Proposed regulations are intended to expand the flexibility and use of health reimbursement arrangements, by allowing health reimbursement arrangements to be integrated with certain types of individual health insurance coverage.
  • More states—California, Oklahoma, and Texas—responded to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. (state sales tax implications of remote or online sales).
  • A California appeals court issued an unpublished decision, affirming the trial court’s conclusion that the individual taxpayers did not qualify for a deferral of gain on a like-kind exchange because they failed to satisfy one of the requirements (that is, they failed to identify replacement property within 45 days of the date of transfer of the relinquished property).
  • Pending legislation (H.4930) in Massachusetts would require that amounts included in income under IRC sections 951 and 951A are to be treated as dividends received for Massachusetts corporate excise purposes, and no deduction would be allowed under IRC sections 245A, 250, or 965(c). The cumulative effect of these changes is that the gross amount of GILTI before the IRC section 250 deduction would be treated as a dividend received for Massachusetts corporate excise tax purposes.
  • A hearing officer in Rhode Island concluded that an online retailer did not have substantial nexus with the state even though the retailer had an affiliate with a retail store located in the state that made sales of similar products under the same brand name. Both the online and retail entities (subsidiaries of the same parent company) sold equestrian apparel and horse-related products. The hearing office looked to a number of factors to determine whether nexus existed—such as the retail store’s return policy, cross-advertising, the presence of a common logo and IP, customer service activities, among others. 
  • The Texas Comptroller determined that a taxpayer’s charges for access to online educational courses (specifically, an online education platform that provided instruction by streaming pre-recorded lectures taught by professors from accredited universities) were not subject to sales and use tax.
  • KPMG provided a report of initial impressions about the proposed regulations under section 1400Z-2—the opportunity zone measures added to the Code by the new U.S. tax law.

Read TaxNewsFlash-United States

Exempt Organizations

  • The IRS posted a draft version of instructions to the 2018 Form 990-T, “Exempt Organization Business Income Tax Return,” that contains several revisions reflecting how unrelated business taxable income (UBTI) will be reported as a result of certain tax reform changes.

Read TaxNewsFlash-Exempt Organizations

Trade & Customs

  • A final rule released by the U.S. Commerce Department, Bureau of Industry and Security (BIS) revises the Commerce Control List (CCL), as well as corresponding parts of the Export Administration Regulations (EAR), to implement changes made pursuant to the Wassenaar Arrangement with regard to dual-use goods and technologies.

Read TaxNewsFlash-Trade & Customs

Indirect Tax

  • Canada: Residential property owners may benefit from new relief available in draft legislation to enact the British Columbia real estate tax (first proposed in the 2018 provincial budget). 
  • Malta: Tax provisions in the 2019 budget include personal tax, VAT, international tax, and private pensions.
  • United States: More states—California, Oklahoma, and Texas—responded to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. (state sales tax implications of remote or online sales).
  • United States: A hearing officer in Rhode Island concluded that an online retailer did not have substantial nexus with the state even though the retailer had an affiliate with a retail store located in the state that made sales of similar products under the same brand name. Both the online and retail entities (subsidiaries of the same parent company) sold equestrian apparel and horse-related products. The hearing office looked to a number of factors to determine whether nexus existed—such as the retail store’s return policy, cross-advertising, the presence of a common logo and IP, customer service activities, among others. 
  • United States: The Texas Comptroller determined that a taxpayer’s charges for access to online educational courses (specifically, an online education platform that provided instruction by streaming pre-recorded lectures taught by professors from accredited universities) were not subject to sales and use tax.
  • UK: The Court of Justice of the European Union (CJEU) issued a judgment concerning a hire-purchase agreement, and concluding that the supply of a vehicle and the supply of credit can be treated as separate supplies for VAT purposes.

Read TaxNewsFlash-Indirect Tax

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