KPMG’s Week in Tax: 30 May - 3 June 2016

KPMG’s Week in Tax: 30 May - 3 June 2016

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

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  • OECD: A discussion draft relating to base erosion and profit shifting (BEPS) Action 15 “Development of a multilateral instrument to implement the tax treaty related BEPS measures” requests comments on technical issues related to the development of the multilateral instrument, which is anticipated to be finalized and open for signature by 31 December 2016. 
  • OECD: The OECD announced that Jamaica and Uruguay have signed the multilateral convention on mutual administrative assistance in tax matters, and Brazil’s instrument of ratification of the convention has been deposited with the OECD and will enter into force on 1 October 2016.


Read TaxNewsFlash-BEPS


  • Canada: Budget bills in Nova Scotia and British Columbia received Royal Assent, while the 2016 budgets for Manitoba and Saskatchewan were presented, and Newfoundland and Labrador’s 2016 budget bill received “first reading.”
  • Canada: Many corporations may be adversely affected by the anti-avoidance rule that recharacterizes certain otherwise tax-free inter-corporate dividends as capital gains that are subject to tax. This expanded rule would apply to dividends received after 20 April 2015.
  • Brazil: The KPMG member firm in Brazil prepared the 2016 guide to Brazilian oil and gas taxation.
  • Dominican Republic: Guidance issued by the executive branch revises the rules for the enrollment process for foreign employees in the Dominican social security system.


Read TaxNewsFlash-Americas

Asia Pacific

  • Japan: A scheduled increase in the rate of the consumption tax will be postponed for more than two years, until 1 October 2019.
  • Australia: The government has proposed new “deductible liability” measures for tax consolidated groups and commercial considerations for mining employees moving to Mongolia.
  • Vietnam: A KPMG report examines corporate income tax, individual (personal) income tax, and indirect tax developments.
  • Vietnam: The government issued guidance concerning tax incentives available for the development of the information technology sector in Vietnam.


Read TaxNewsFlash-Asia Pacific


  • France: The Council of State held that non-refundable and unused multiple-entry movie theater cards and books of tickets are subject to value added tax (VAT).
  • Germany: There were changes made to a pending law on the modernization of taxation procedures, and currently pending is a bill for the ratification of the multilateral competent authority agreement (MCAA) on the exchange of country-by-country reports.
  • Netherlands: A communication from the Deputy Minister of Finance, sent to the lower house, may indicate that there could be a change to the withholding tax rules that apply for cooperatives.
  • Italy: Tax authorities published the first guidelines under the “mini one-stop shop” (MOSS) regime relating to VAT in Italy (the MOSS regime applies with respect to telecommunications, broadcasting, or electronically supplied services provided to non-business consumers).
  • Poland: The Ministry of Finance updated a list of “frequently asked questions” (FAQs) concerning the selection of taxpayers for audit, pursuant to the standard audit file method.
  • Serbia: Serbia’s Ministry of Finance issued “comments” concerning the registration of foreign entities and their representatives for VAT purposes. 
  • UK: The Court of Justice of the European Union (CJEU) rendered its judgment in two cases on referral from the United Kingdom, concerning the VAT treatment of card handling services. The CJEU found that the processing of debit and credit card payments, as in these cases, did not qualify for the VAT exemption for payment transactions.


Read TaxNewsFlash-Europe


  • Nigeria: A tax tribunal held that provisions under the Nigerian law specifically governing offshore production contracts, and relied upon by the Federal Inland Revenue Service in asserting that the costs were not tax-deductible, did not apply because those particular statutory provisions relate to cost recoverability and oil allocations—and not to the tax deductibility of expenses.


Read TaxNewsFlash-Africa

United States

  • The IRS Large Business and International (LB&I) division publicly released two practice units concerning the treatment of “fixed or determinable annual or periodical” (FDAP) payments.


Read TaxNewsFlash-United States


  • The IRS plans to update the International Data Exchange Service (IDES) data preparation process to improve security. 


Read TaxNewsFlash-FATCA / IGA / CRS

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