KPMG’s Week in Tax: 18-22 April 2016

KPMG’s Week in Tax: 18-22 April 2016

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

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  • Canada: The Canada Revenue Agency (CRA) issued a technical interpretation outlining the types of rulings that potentially may be shared with other countries under Canada's new commitment to exchange information on certain tax rulings.
  • Bermuda: Bermuda signed the multilateral competent authority agreement for the automatic exchange of country-by-country reports, thereby putting into place the automatic exchange framework as envisioned by the base erosion and profit shifting (BEPS) project Action 13.
  • International: The International Monetary Fund, the Organisation for Economic Cooperation and Development, the United Nations, and the World Bank Group announced details of a joint effort to intensify cooperation on tax issues—the “Platform for Collaboration on Tax.”


Read TaxNewsFlash-BEPS


  • Nigeria: The Tax Appeal Tribunal held that a company was not liable for “pay-as-you-earn” (PAYE)—i.e., employment taxes—for workers who were provided to it by another company during the years between 2005 and 2009.


Read TaxNewsFlash-Africa


  • Canada: Canada’s Finance Department released draft legislation to implement certain measures that were proposed in the 2015 and 2016 federal budgets. The draft legislation features amendments to the Income Tax Act and the Excise Tax Act.
  • Canada: The 2016 budgets for the provinces of Prince Edward Island and Nova Scotia were delivered on 19 April 2016. There were no changes in either province’s budget to individual (personal) or corporate tax rates.


Read TaxNewsFlash-Americas

Asia Pacific

  • Australia: The 2016-2017 Federal Budget will be delivered on 3 May 2016. KPMG tax professionals have prepared what’s likely to be contained in the 2016 release.
  • Myanmar: New guidance updates the rules concerning economic activities with respect to foreign investment. The activities range from those that are prohibited, to those that are allowed under specific conditions.
  • Hong Kong: Representatives of the governments of Hong Kong and Latvia on 13 April 2016 concluded an income tax treaty that removes Hong Kong from Latvia’s list of “low tax” jurisdictions.
  • India: The KPMG member firm in India produced reports on topics addressing the foreign tax credit, value added tax (VAT) changes, the treatment of web-hosting services, and new tax forms, among other items.


Read TaxNewsFlash-Asia Pacific


  • Poland: Draft legislation in Poland aims to develop the shipbuilding and related industries by providing various tax incentives. It is anticipated that, if enacted, the legislation would be effective 1 January 2017.
  • Czech Republic: A draft amendment would make changes to the VAT rules. If enacted, the measures would be effective beginning 1 January 2017. 
  • Spain: The Court of Justice of the European Union (CJEU) issued a judgment in a case concerning the Spanish tax lease system as amended, and the CJEU upheld a prior determination that a challenge to this version of the tax regime was unfounded.
  • EU: The European Commission (EC) issued updated draft guidance clarifying that a “domestic sale” is not to be considered when establishing the customs value of imported goods, given the phase out of the “first sale” rule.


Read TaxNewsFlash-Europe


  • Brazil: The Brazilian tax administration published an updated version of FATCA reporting guidance containing information about required reporting obligations. 
  • Canada: Canadian financial institutions will be required to provide the CRA with information on accounts held by non-residents of Canada beginning in 2018. The CRA will provide this information to other countries’ tax authorities in exchange for information about Canadian financial account holders in their jurisdictions. Financial institutions must have procedures in place to identify this information by 1 July 2017.


Read TaxNewsFlash-FATCA / IGA / CRS

Trade & Customs

  • United States: Legislation passed by the House Ways and Means Committee aims to revise the miscellaneous tariff bill (MTB) process. Through the MTB process, Congress temporarily suspended or reduced tariffs for certain imported products not made in the United States. The MTB regime expired in 2012.
  • EU: The EC released two items related to customs administration in the EU—a new edition of “customs blueprints” for use in assisting customs administrations and a “work programme” relating to the development and deployment of the electronic systems provided for in the Union Customs Code.


Read TaxNewsFlash-Trade & Customs

United States

  • Treasury’s Community Development Financial Institutions Fund announced amendments to the New Markets Tax Credit (NMTC) program—specifically, changes that combine the 2015 and 2016 NMTC allocation rounds and increase allocation authority to $7 billion.
  • The U.S. Supreme Court affirmed a decision of the Nevada high court concerning the Nevada courts’ exercise of jurisdiction over the Franchise Tax Board of California. The U.S. Supreme Court split evenly, thus allowing the jurisdiction, but concluded that the U.S. Constitution does not permit Nevada courts to award the taxpayer (a private citizen) damages greater than Nevada law would allow a private citizen in a similar suit against Nevada.
  • The IRS publicly released a legal advice memorandum relating to certain “bad boy” nonrecourse carveouts and their impact on debt allocations under section 752 and at-risk basis under section 465.


Read TaxNewsFlash-United States


  • The Senate Finance Committee approved, by voice vote, a bill that addresses identity theft, fraud prevention, and related procedural matters.
  • The Senate passed H.R. 636, the legislative vehicle for reauthorizing Federal Aviation Administration (FAA) programs. As passed by the Senate, the bill would extend through 30 September 2017, certain taxes and tax rates that are dedicated to the airport and airway trust fund. 


Read TaxNewsFlash-Legislative Updates

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