KPMG’s Week in Tax: 19 - 23 November 2018 | KPMG | LU
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KPMG’s Week in Tax: 19 - 23 November 2018

KPMG’s Week in Tax: 19 - 23 November 2018

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

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Asia Pacific

  • Australia: The tax authorities at both federal and state levels are focused on identifying the payroll tax implications for businesses that engage independent contractors.
  • Malaysia: The 2019 budget includes measures for a service tax on digital products and an excise tax on sweetened beverages.

Read TaxNewsFlash-Asia Pacific

FATCA / IGA / CRS

  • India: The Central Board of Direct Taxes provided a list of jurisdictions that, for purposes the common reporting standard (CRS) regime, certain entities located in those jurisdictions will not be considered in determining “passive non-financial entity” status.
  • Bermuda: The tax authority updated the tax information reporting portal “user guide” with respect to submitting a “nil” CRS return and updated a list of “frequently asked questions” (FAQs).
  • France: Updated guidance with respect to the CRS regime includes a new subsection regarding the obligations of account holders.
  • Netherlands: The Dutch tax administration announced the 2019 reporting deadlines for information returns relating to the FATCA and CRS regimes.

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • OMB’s Office of Information and Regulatory Affairs (OIRA) completed its review of proposed regulations as guidance concerning the business interest limitation under section 163(j)—a measure enacted as part of the new U.S. tax law. This action clears the way for Treasury and the IRS to release the proposed regulations.
  • Notice 2018-91 provides there are no changes to the "required amendments list" for 2018 with respect to qualified retirement plans.
  • A notice on the tier 2 tax rates for railroads provides there are no changes for 2019.
  • Proposed regulations (REG-106706-18) provide guidance concerning changes made by the new U.S. tax law to the basic exclusion amount used in computing federal estate and gift taxes, and thus affect the estates of decedents dying after 2017 and donors of gifts made after 2017.
  • Rev. Proc. 2018-58 provides an updated list of time-sensitive acts that may be postponed by the IRS in response to a federally declared disaster or a terroristic or military action.
  • Notice 2018-90 extends withholding and reporting transition relief (originally provided by Rev. Rul. 2018-17) with regard to payments of IRAs made to a state’s unclaimed property fund before the earlier of: (1) January 1, 2020, or (2) the date it becomes reasonably practical to comply with the withholding and reporting requirements described in Rev. Rul. 2018-17.
  • Final regulations (T.D. 9843) under section 263A concern allocation of costs to certain property produced or acquired for resale by a taxpayer under the “simplified methods.” In general, the rules under these final regulations are mandatory, and thus require manufacturers with average gross receipts of more than $50 million to change their methods of accounting if they currently use the simplified production method to allocate additional 263A costs.
  • Notice 2018-88 concerns possible future guidance that would help employers understand how to structure integrated health reimbursement arrangements (HRAs) to avoid assessable payments (section 4980H) and potential loss of the exclusion from income for employer-provided health benefits (section 105(h)).
  • Notice 2018-89 provides guidance on the treatment of leave-based donation programs offered by employers to aid victims of Hurricane Michael.
  • The IRS updated the lists of locations (e.g., counties) in Florida, Georgia, North Carolina, and Virginia where taxpayers may be eligible for tax relief in response to recent hurricanes. The tax relief includes more time to file returns, pay taxes, and perform certain other time-sensitive acts.
  • More states—Louisiana and Wyoming, plus the District of Columbia—have responded to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. (state sales tax implications of remote or online sales).
  • The California Franchise Tax Board issued a chief counsel ruling concluding that a mortgage servicer was not a financial corporation for California income tax purposes.
  • The Kentucky Department of Revenue issued a technical advice memorandum (TAM) that provides guidance concerning which taxes are considered deductible for purposes of computing Kentucky corporate income tax liability.

Read TaxNewsFlash-United States

Trade & Customs

  • The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that a bank (a French entity) agreed to settle its potential civil liability for apparent violations of the U.S. sanctions concerning Cuba, Iran, and Sudan.

Read TaxNewsFlash-Trade & Customs

Europe

  • France: The Court of Justice of the European Union issued a judgment in a case concerning the compatibility of EU law with the French withholding tax levied on dividends paid by French companies to non-resident loss-making companies. The CJEU concluded that the French measure was contrary to the free movement of capital under EU law.
  • Poland: New legislation has been enacted that includes an "exit tax;" rules for taxation of profits from virtual currencies; a reduced rate of corporate income tax for certain taxpayers; and a preferential tax rate on income generated by qualified intellectual property rights.

Read TaxNewsFlash-Europe

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