KPMG’s Week in Tax: 20 - 24 February 2017

KPMG’s Week in Tax: 20 - 24 February 2017

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

1000

Related content

Asia Pacific

  • Singapore: The 2017 budget was presented this week, and includes measures concerning individual and corporate tax proposals.
  • Hong Kong: The budget for 2017-2018 also presented this week includes discussions of tax provisions.
  • Bahrain: A unified agreement for value added tax (VAT) and selective tax in the Gulf Cooperation Council (GCC) countries was signed. This follows approval of the region-wide VAT regime by the cabinet of the Kingdom of Saudi Arabia in late January 2017.
  • India: A Protocol amending the income tax treaty (1996) between India and Israel has been “notified.”
  • India: The Goods and Service Tax (GST) Council gave final approval to the GST Compensation Bill. The GST Council will meet in early March 2017 to discuss the GST laws, with an aim to table the laws before the Parliament in the second half of the session on the Union Budget 2017-18, set for 9 March 2017.
  • India: A tribunal held that a payment for technology services (data centre, infrastructure, connectivity, and application technology) provided by the taxpayer from Hong Kong, is not taxable as “royalty” income or as “fees for technical services.”
  • India: Two high courts each held that because securities were held as stock-in-trade, there was to be no disallowance of expenditures.
  • India: A high court addressed the standard that an Assessing Officer may use if not satisfied with the correctness of the taxpayer’s claim in respect of an expenditure.
  • Thailand: Self-employed income earners may be forced to itemize their actual expenses under the new individual (personal) income tax regime.

Read TaxNewsFlash-Asia Pacific

Africa

  • Nigeria: The term “payroll” has been defined and clarified for purposes of computing employer’s contribution to the employee’s compensation fund. 
  • South Africa: Tax proposals were included in the 2017-2018 budget, released this week. 

Read TaxNewsFlash-Africa

Americas

  • Brazil: A special customs regime provides benefits for Brazilian companies that produce goods for export. Under the regime, taxes are suspended with respect to inputs (whether imported or purchased locally in the domestic market) that are used in the manufacturing process with respect to the products produced and scheduled for export. Also, the finished goods are exempt from taxation on export.
  • Canada: Tax measures are included in the British Columbia budget for 2017, and include changes to reduce the small business corporate income tax rate to 2% (from 2.5%), extending the scientific research and experimental development (SR&ED) tax credit for five years, reducing medical services plan premiums, and phasing out provincial sales tax on electricity sales.
  • Canada: Quebec’s budget bill (2016) received royal assent, and implements several measures that were announced in the province's 2016 and 2015 budgets and in various Information Bulletins published in 2014, 2015 and 2016.

Read TaxNewsFlash-Americas

BEPS

  • EU: The EU Member States reached an agreement on a directive that will amend the Anti-Tax Avoidance Directive (Council Directive (EU) 2016/1164 of 12 July 2016—“ATAD 1”). The new directive (“ATAD 2”) amends Article 9 of ATAD 1 (concerning certain hybrid mismatches between EU Member States).
  • Switzerland: While Swiss citizens voted “no” on the proposed corporate tax reform, the vote has very little or no direct impact on implementation of the BEPS recommendations, and in particular BEPS Action 13 and the country-by-country (CbC) reporting.

Read TaxNewsFlash-BEPS

Europe

  • Germany: The German Federal Tax Court concluded that invoices can be corrected with retroactive effect.
  • Czech Republic: Applications are solicited under a “low carbon” technology program that provides financial aid to entities that produce certain innovative technologies relating to electro-mobility, renewable energy management, and secondary raw material uses.
  • Czech Republic: The Chamber of Deputies approved a bill to amend certain tax provisions, including the VAT law, with the amendments to be effective 1 April 2017.
  • EU: The European Commission has released its proposals to simplify and modernise the VAT rules on e-commerce, in stages, between now and 2021.
  • UK: Tribunal decisions each address exchange losses following change in functional currency and the “unallowable purposes rule.”
  • UK: Details have been released regarding how the Pensions Advice Allowance will work.
  • UK: A court decision addresses the VAT treatment of gift vouchers with respect to sales promotion schemes.

Read TaxNewsFlash-Europe

Transfer Pricing

  • India: A tribunal held that the “resale price method” is the most appropriate method to benchmark an international transaction when the taxpayer purchases goods from foreign related parties and then resells the same goods without adding any value to them. 
  • Hong Kong: The government’s plan for implementing a statutory transfer pricing regime was mentioned in this year’s budget speech, and implementing legislation is expected at some point in 2017.

Read TaxNewsFlash-Transfer Pricing

FATCA / IGA / CRS

  • Ireland: A document was released highlighting changes to the file validation process that is to apply with respect to the filing of FATCA financial account information. 
  • Mexico: An amended version of FATCA regulations was issued with measures intended to assist Mexican financial institutions with implementation of the FATCA regime.
  • United States: A new “frequently asked question” (FAQ) was added to a list of FAQs about FATCA compliance. The new FAQ provides guidance for qualifying intermediaries (Qis) with branches that would like to apply for qualified derivatives dealer (QDD) status.
  • United States: All qualified intermediary (QI), withholding foreign partnership (WP), and withholding foreign trust (WT) agreements that are in effect before 1 January 2017 must be renewed, and the renewals are due by 31 March 2017.
  • Vietnam: Guidance was issued concerning an agreement between the “competent authorities” of Vietnam and the United States concerning implementation of the FATCA regime in Vietnam.

Read TaxNewsFlash-FATCA / IGA / CRS

Trade & Customs

  • China: A pilot program implements a registration process for non-special cosmetics imported into the Pudong New Area of Shanghai. The new pilot process is effective 1 March 2017 and remains in effect until 21 December 2018.
  • Australia: The government introduced a bill, currently before Parliament, to impose goods and services tax (GST) on supplies of low value imported goods to Australian consumers.

Read TaxNewsFlash-Trade & Customs

United States

  • There is a reminder of the new filing deadline for calendar year 2016 FBAR reports.  
  • A Tax Court memorandum opinion has potentially significant implications for physicians having both a medical practice and an ownership interest in a separate medical facility.
  • Alabama’s tax tribunal held that a bank taxpayer can deduct dividends paid to it by an Alabama-organized real estate investment trust (REIT) for purposes of the bank’s computation of its financial institution excise tax.
  • The governor of Arkansas signed House Bill 1162 that revises the rules for sales tax imposed on digital goods and codes, candy, and soft drinks. 
  • The Pennsylvania Department of Revenue issued guidance concerning canned software, and the expanded sales tax base that applies to digital goods and software (including canned software support services).
  • In Virginia, pending legislation would establish a tax amnesty program.

Read TaxNewsFlash-United States

Exempt Organizations

  • Publicly available information from approved applications for tax exemption using Form 1023-EZ is now available electronically (online). Previously, Form 1023-EZ data was only available through a process that included completing and submitting Form 4506-A to the IRS.

Read TaxNewsFlash-Exempt Organizations

© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Request for proposal

 

Submit

KPMG's new digital platform

KPMG International has created a state of the art digital platform that enhances your experience, optimized to discover new and related content.