KPMG’s Week in Tax: 7 - 11 November 2016 | KPMG | US

KPMG’s Week in Tax: 7 - 11 November 2016

KPMG’s Week in Tax: 7 - 11 November 2016

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

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U.S. election results

  • Preliminary observations regarding the implications of the election on tax legislation in 2017 and possible outlook for the “lame duck” session—read a KPMG report prepared by the KPMG member firm in the United States.
  • The electorate in certain U.S. states rejected some and approved other tax proposals (ballot initiatives)—read a KPMG report.
  • Ireland: With the election in the United States, a revised U.S. tax policy could affect tax, trade and investing in Ireland—read a KPMG report prepared by the KPMG member firm in Ireland.
  • Switzerland: The CEO of the Swiss-American Chamber of Commerce addressed implications of the election of Donald Trump in the United States on the U.S. relationship with Switzerland—watch a video interview prepared by the KPMG member firm in Switzerland.
  • Australia: The election of Donald Trump to be the U.S. president raises four main taxation questions: (1) What are his policies? (2) Are they likely to be legislated? (3) What will they mean for the budget and the economy? and (4) What does Mr. Trump mean for the global tax agenda?—read a KPMG report prepared by the KPMG member firm in Australia.

Americas

  • Canada: Businesses subject to Alberta’s new carbon levy need to be prepared to comply with the rules when the levy takes effect on 1 January 2017.
  • Colombia: A new income tax treaty has been signed with the United Kingdom, and is pending completion of the ratification procedures.
  • Canada: Certain investors must provide goods and services tax / harmonized sales tax (GST/HST) and Quebec sales tax (QST) information by 15 November 2016.
  • Canada: Finance Quebec announces the health contribution will end as of 1 January 2017.
  • Canada: Jurisdictions selected for mutual agreement procedure (MAP) peer review and monitoring process, which will begin in December 2016, are Belgium, Canada, the Netherlands, Switzerland, the UK, and the United States.

Read TaxNewsFlash-Americas

Asia Pacific

  • Australia: Proposed changes to withholding tax could affect collective investment vehicles (CIVs).
  • China: The customs authority issued guidance that allows for customs self-declarations and tax and customs duty payments, thus allowing for expedited customs clearance. 

Read TaxNewsFlash-Asia Pacific

Europe

  • Hungary: The government has proposed legislation for corporate and individual tax changes, scheduled to be effective beginning in 2017.
  • Slovakia: There are new value added tax (VAT) rules on vouchers, and the register of “beneficial owners” has been replaced by a register of partners. 
  • Belgium: Companies subject to Belgian corporate income tax and non-resident corporate income tax must report payments totaling at least €100,000 per financial year made to recipients and beneficiaries established in “tax haven” countries. 
  • Luxembourg: A review of a Protocol amending the income tax treaty between Luxembourg and Russia (1998) reports on the applicable withholding tax rates for dividends, interest, and royalties. 
  • Poland: Changes to two standard audit file items relating to information required to be reported for purposes of the VAT and the revenue and expense ledger are effective 1 January 2017.
  • Russia: Measures in the so-called “de-offshorization law” aim to prevent the use of offshore companies and unincorporated foreign structures—for example, funds, partnerships, trusts, other forms of collective investment vehicle and/or trust management—for tax planning purposes.
  • Netherlands: Implementation of an EU Directive regulating the entry and residence of non-EU nationals who are transferred within a company is effective 29 November 2016.
  • Sweden: A proposal for a new tax on financial services would apply to the financial services sector—specifically, this financial activity tax would be imposed at a rate of 15% of total salary costs during a tax year. In other words, the tax would be an additional salary tax, effective beginning in 2018.
  • Switzerland: There are a few upcoming regulatory tax projects that will affect the Swiss insurance industry.
  • Bulgaria: The tax treatment of services provided by international card operators to Bulgarian financial institutions raises questions concerning tax withheld at source and VAT.
  • Poland: Tax legislation amending the corporate income tax and individual (personal) income tax laws in Poland generally are effective beginning 1 January 2017.
  • Sweden: A court in Sweden found that a German company that regularly conducted business from the same place in Sweden (albeit for a limited period of time) was deemed to have a permanent establishment.

Read TaxNewsFlash-Europe

FATCA / IGA / CRS

  • Ireland: A list of “frequently asked questions” (FAQs) was updated concerning the rules for the automatic exchange of information on financial accounts.

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • Notice 2016-69 provides guidance on leave-based donation programs, to aid victims of Hurricane Matthew.
  • Final regulations provide that Form 1099-C, “Cancellation of Debt,” is no longer required to be filed at the end of a 36-month non-payment testing period for a deemed discharge of indebtedness.
  • An IRS “practice unit” (guidance for IRS personnel) was publicly issued concerning portfolio debt exemption.
  • A report reviews the approximately 30 “tax extenders” that are scheduled to expire at the end of the year.
  • An administrative law judge for the Arkansas Office of Hearings and Appeals determined that the purchase of a welding machine used to create custom-crafted jewelry did not qualify for the state’s manufacturing exemption.
  • A California superior court held that the state’s different treatment of interstate and intrastate businesses did not violate the Commerce Clause. 
  • The Franchise Tax Board in California issued guidance addressing how it intends to handle Multistate Tax Compact election cases and refund applications following the U.S. Supreme Court’s recent denial of certiorari in the Gillette case.
  • Virginia’s high court agreed to review a case addressing the deductibility of royalties paid by a retailer to a related party. 
  • The appellate division of the Department of Revenue in Washington State concluded that a broker-dealer was not entitled to use the B&O tax rate that applies for “international investment management services.”

Read TaxNewsFlash-United States

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