KPMG’s Week in Tax: 14-18 March 2016

KPMG’s Week in Tax: 14-18 March 2016

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

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  • UK: The Chancellor of the Exchequer presented the 2016 Budget—one that announces a reduction in the main rate of corporation tax to 17% in 2020, and that reflects a series of tax revenue-raising measures. A “business road map” also includes a timetable for implementing the base erosion and profit shifting (BEPS) recommendations in UK law.
  • UK: Provisions in the 2016 budget concerning indirect taxes include a “sugar tax” to be imposed on producers and importers of soft drinks, and measures providing enhanced authority for HM Revenue & Customs to collect value added tax (VAT) from foreign online suppliers of goods into the UK.
  • Czech Republic: The Finance Ministry released for public comment proposals for tax law changes that would affect individual and business income tax and VAT, among other measures.
  • Baltic countries: “Tax cards” providing corporate and individual tax rates and other tax information for use by taxpayers in Latvia, Lithuania, and Estonia were provided for 2016.
  • Cyprus: Certain electronically filed returns were granted a three-month extension. 

Read TaxNewsFlash-Europe

United States

  • The staff of the Joint Committee on Taxation (JCT) released the “General Explanation of Tax Legislation Enacted in 2015” (JCS-1-16)—known as the “Bluebook”—that provides technical explanations of tax legislation enacted last year. The Bluebook specifically addresses the partnership audit reform provisions that were enacted in November 2015 (as amended). Yet, the Bluebook did not answer all questions about the partnership audit rules.
  • Newly released IRS “practice units” concern: (1) the process for computing the limitation and deferral of deductible corporate interest expense under section 163(j); (2) concepts of foreign personal holding company income; and (3) verifying refund requests of section 1445 withholding on dispositions of U.S. real property interests.

Read TaxNewsFlash-United States


  • Senegal: An income and capital tax treaty signed with Luxembourg and that incorporates certain recommendations under the base erosion and profit shifting (BEPS) project of the OECD is pending ratification. 

Read TaxNewsFlash-Africa


  • Canada: The House of Commons Standing Committee on Finance released its recommendations for measures that could be included in the federal budget scheduled to be presented 22 March 2016.
  • Canada: A final version of guidance was provided for oil and gas companies and mining companies that must begin reporting tax and other payments they make to Canadian and foreign governments under Canada’s new reporting regime. Affected taxpayers must file reports for fiscal years that begin after 1 June 2015.

Read TaxNewsFlash-Americas

Transfer Pricing

  • Indonesia: A list of “frequently asked questions” (FAQs) under the transfer pricing regime was provided. 
  • India: The Central Board of Direct Taxes (CBDT) issued new guidelines for identifying and selecting cases for transfer pricing scrutiny; clarifying the role of Assessing Officers and Transfer Pricing Officers; and providing guidance for maintenance of the tax authorities’ database of transfer pricing case referrals.

Read TaxNewsFlash-Transfer Pricing

Trade & Customs

  • EU: Certain activities will not apply to non-Union and Union goods temporarily leaving the customs territory of the European Union during their transit by sea or air between two points in that territory, provided they are shipped directly without a stop outside the customs territory of the EU.
  • United States: The Treasury Department’s Office of Foreign Assets Control issued a “finding of violation” to a credit card company concerning assets of Iranian banks. 
  • United States: Government agencies issued final rules concerning trade with Cuba, including provisions allowing vessels with cargo intended for other destinations, to travel to Cuba under a license exception rather than having to obtain a license for the cargo bound for the other destinations, on transit to Cuba.

Read TaxNewsFlash-Trade & Customs

Asia Pacific

  • India: The Mumbai Bench of the Income-tax Appellate Tribunal held that consultancy services for exploration, mining, and extraction rendered by a German company do not constitute a permanent establishment (PE) in India under the India-Germany income tax treaty.

Read TaxNewsFlash-Asia Pacific


  • British Virgin Islands: A reminder was issued to financial institutions on the registration and reporting requirements under the FATCA and common reporting standard (CRS) regimes.

Read TaxNewsFlash-FATCA / IGA / CRS

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