KPMG’s Week in Tax: 3 - 7 October 2016

KPMG’s Week in Tax: 3 - 7 October 2016

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

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  • Belgium: A draft law would implementing changes under the EU Parent-Subsidiary directive relating to the anti-hybrid and anti-abuse rules and would allow the “exit tax” to be made either as a direct payment or over a period of years under a payment “spread.”
  • Ireland: Budget 2017 will be announced on 11 October 2016. 
  • Bulgaria: There are new rules on the tax treatment of benefits in-kind provided to employees and concerning the value added tax (VAT) treatment of “mixed use” company assets made available to employees. 
  • Poland: A draft legislative amendment would revise the VAT laws and, if enacted, would be effective 1 January 2017
  • France: The Constitutional Court (Conseil Constitutionnel) issued a judgment concluding an exemption from a 3% tax that normally is imposed on dividend distributions (the exemption from the 3% tax applies for dividends distributed within French tax groups) is unconstitutional.
  • Switzerland: Both chambers of the Swiss Parliament approved the “small revision” VAT legislation that is expected to be effective 1 January 2018.  


Read TaxNewsFlash-Europe


  • Dominican Republic: Measures concerning a withholding tax, imposed at a rate of 10%, on dividends distributed by companies that are located in free trade zones have been implemented.
  • Dominican Republic: A general notice allows a period of six months for companies to file documents that demonstrate compliance with the rules for company transformation or adaptation. Failure to comply may cause the company’s taxpayer registration number to be made inactive.
  • Mexico: An estate (inheritance) and gift tax proposal has been presented to the Congress.
  • Canada: Individuals and trusts may be affected by changes to the principal residence exemption—amendments that will limit the ability of certain taxpayers to eliminate or reduce the capital gain on the sale of their home.


Read TaxNewsFlash-Americas

Asia Pacific

  • India: Revised income computation and disclosure standards (ICDS) provide a new framework for computation of taxable income in relation to income under the headings “Profit and gains of business or profession” and “Income from other sources.” 
  • India: A tribunal addressed the tax treatment of interest paid on partner’s capital. 
  • India: The Supreme Court allowed a company a share issue expenditure and a bonus expenditure, even though the bonus amount was deposited in a trust and, at the end of a dispute with employees, was paid over to them. 
  • New Zealand: The Inland Revenue Department released a new draft “Interpretation Statement” (IS) that reflects a revised position concerning the income tax deductibility of a feasibility expenditure. 
  • Thailand: Guidance amends the rules for international headquarters (IHQs) and international trading center regimes, concerning the treatment of tax loss carryforwards and the criteria for foreign national employees to qualify for the flat 15% individual (personal) income tax rate.
  • Australia: There are new measures relating to changes to goods and services tax (GST) rules related to cross-border supplies.


Read TaxNewsFlash-Asia Pacific

United States

  • The IRS issued a reminder to individual taxpayers to renew their ITINs (individual taxpayer identification numbers).
  • Republican members of the House Ways and Means Committee wrote to administration officials and reiterated their concerns about plans to move forward to finalize regulations under section 385.
  • Puerto Rico’s Treasury Department issued guidance establishing general procedures for the public release of taxpayer rulings and administrative determination letters on a “no name” or anonymous basis.
  • Regulations were issued under sections 707 and 752 relating to: (1) disguised sales of property involving partnerships; (2) allocations of partnership liabilities; and (3) a variety of other partnership-related items.
  • Final regulations were issued concerning the application of the credit for increasing research activities pursuant to section 41 for computer software that is developed by or for the taxpayer, for the taxpayer’s internal use—i.e., “internal use software.”
  • The California Franchise Tax Board finalized revisions to the state’s market-based sourcing regulation for sourcing sales of other than those involving tangible personal property. The regulation was finalized without the inclusion of “asset manager” examples that had been part of the proposed regulation.
  • A new law in California clarifies that for purposes of the unclaimed property rules that apply for banks and financial institutions, certain electronic transactions will be considered evidence that the owner of the account has increased or decreased the amount of a deposit.
  • A ballot measure in Oregon, if approved by voters, would impose a gross receipts-based minimum tax on Oregon corporations with more than $25 million in Oregon sales.


Read TaxNewsFlash-United States


  • Nigeria: A tax amnesty program allows for the waiver of penalties and interest on certain tax arrears from the periods between 2013 and 2015. 


Read TaxNewsFlash-Africa

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