KPMG’s Week in Tax: 29 May - 2 June 2017 | KPMG | US

KPMG’s Week in Tax: 29 May - 2 June 2017

KPMG’s Week in Tax: 29 May - 2 June 2017

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

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BEPS and Transfer Pricing

  • OECD: Djibouti agreed to the inclusive framework under the base erosion and profit shifting (BEPS) project and the Global Forum on Transparency and Exchange of Information for Tax Purposes.
  • OECD: A document, approved by the Inclusive Framework on BEPS, was released by the Organisation for Economic Co-operation and Development (OECD) and will form the basis of the peer review of the Action 6 minimum standard on preventing the granting of treaty benefits in inappropriate circumstances.

Read TaxNewsFlash-BEPS

 

  • OECD: An initial analysis is provided of a discussion draft was released for implementation guidance on hard-to-value intangibles under the BEPS Action 8.
  • Pakistan: The 2017-18 finance bill includes provisions establishing an office responsible for conducting transfer pricing audits, and penalty provisions with respect to certain taxpayer failures such as the failure to maintain or produce transfer pricing documentation and the failure to furnish a timely country-by-country (CbC) report.
  • Turkey: A draft “transfer pricing communique” generally reflects measures of the OECD’s BEPS Action 13 on CbC reporting and transfer pricing documentation. The amendments related to transfer pricing would be regulated by a draft Council of Minister decision (2017/01), and are expected to be effective before the end of 2017.

Read TaxNewsFlash-Transfer Pricing

Americas

  • Brazil: A new immigration law, which replaces the existing law from 1980, provides more flexible rules for migrants.
  • Canada: The consultation on “cash purchase tickets” (cash purchase tickets are often issued to farmers who sell listed grain to licensed grain elevator operators) as announced in the federal budget 2017, has been extended to 24 July 2017. 
  • Canada: Manitoba’s budget bill for 2017—implementing corporate and personal (individual) tax measures—received a first reading.

Read TaxNewsFlash-Americas

Asia Pacific

  • Korea: A report reflects summaries of recent tax developments, including summaries of decisions of the Supreme Court. Among the topics covered are information returns, holding companies, and tax-exempt business income.
  • Pakistan: Provisions included in the 2017 budget (released in late May 2017) include income tax, sales tax, excise tax, and customs law amendments. The measures generally have an effective date of 1 July 2017.
  • Australia: Trusts considering electing-in may need to explore technical and practical implementation issues of the attribution managed investment trust (AMIT) regime.
  • Australia: The Australian Taxation Office released a draft taxation ruling seeking to clarify the tax treatment of rights and “retail premiums” under renounceable rights offers when shares are held on capital account.
  • Thailand: A report (in table format) summarizes recent amendments to the business laws.
  • Thailand: A release from the Revenue Department, concerning the filing of audited accounts for an e-filing corporate taxpayer, states that the submission of the audited accounts can be done electronically (instead of physically as per earlier guidance) as from 1 November 2017.
  • UAE: Under new provisions, an excise tax is to be imposed on goods considered harmful to human health and the environment (including tobacco, energy and carbonated drinks), and on luxury goods. 

Read TaxNewsFlash-Asia Pacific

Europe

  • EU: The European Commission announced the completion of negotiations of an agreement between the EU and Norway on administrative cooperation, recovery assistance, and addressing fraud with respect to value added tax (VAT).
  • EU: The Council of the European Union unanimously adopted a Council Directive amending Directive (EU) 2016/1164 as regards hybrid mismatches with third countries. This action on an anti-tax avoidance directive (ATAD2) follows an agreement reached by the ECOFIN Council at a February 2017 meeting and an opinion rendered by the European Parliament in April 2017.
  • Germany: The German Ministry of Finance (BMF) has adjusted for VAT purposes, the VAT application decree to reflect recent developments with respect to the VAT group and the input tax deduction available on the purchase, holding, and management of shareholdings. These changes apply partly to all open cases and partly to transactions as of 1 January 2019.
  • Netherlands: Due to an amendment of the law, it is no longer possible for temporary employment agencies to be classified in the sector fund in which more than 50% of their workforce is available for contract.
  • Netherlands: A report summarizes news of recent tax developments that may affect or concern taxpayers in the financial services sector, including interest deductions and VAT exemptions for cost-sharing groups.
  • Poland: Under the rules relating to the standard audit file for tax purposes, a draft amendment to the tax law would impose a new obligation for certain taxpayers to transmit information and data about their back accounts to the tax administration.
  • Sweden: The Supreme Administrative Court issued a judgment holding that a VAT deduction was available with respect to consultancy costs that were incurred in connection with a corporate restructuring.

Read TaxNewsFlash-Europe

FATCA / IGA / CRS

  • OECD: “Occupational retirement schemes” in Hong Kong were identified as a scheme designed to circumvent the application of the common reporting standard (CRS). 
  • Belgium: The online FATCA portal opened for submission of FATCA returns relating to income year 2016 and submission of corrections for the returns relating to income years 2014 and 2015. The deadline for submission of returns is 30 June 2017.
  • Portugal: A ministerial order amended the appendix of a previous ministerial order and the previously approved structure and contents of the XML schema used for filing the FATCA returns to the tax and customs authority.

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • The IRS announced taxpayers requesting letter rulings, closing agreements, and certain other rulings will need to make user fee payments electronically using the federal government’s Pay.gov system. Checks will no longer be accepted. This new requirement mandating electronic payment of user fees is being phased in beginning 15 June 2017, and ending 15 August 2017. After 15 August 2017, Pay.gov will become the only permissible payment method.
  • The U.S. Court of Federal Claims denied a taxpayer's request to to apply the interest netting rules of section 6621(d), holding that the taxpayer was not entitled to net its overpayment interest with underpayment interest of a foreign sales corporation (FSC) that was owned by the taxpayer because the taxpayer and the FSC were not the same taxpayer (as required under section 6621(d)).

Read TaxNewsFlash-United States

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