KPMG’s Week in Tax: 8 - 12 January 2018 | KPMG | US
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KPMG’s Week in Tax: 8 - 12 January 2018

KPMG’s Week in Tax: 8 - 12 January 2018

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

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Transfer Pricing and BEPS

  • Taiwan: The Ministry of Finance announced a “safe harbor” exemption with respect to Master file and country-by-country (CbC) reporting.
  • India: Tax officials have signed the first bilateral advance pricing agreement (APA) with the United States. This bilateral APA concerns the information technology and information technology-enabled services sector and involves determining a cost-plus markup for transactions of an Indian captive service provider.

Read TaxNewsFlash-Transfer Pricing

Europe

  • Belgium: Certain corporate tax reform measures are effective in 2018. Other provisions—including a regime of tax consolidation, and provisions implementing the EU anti-tax avoidance directives—will be effective beginning in 2019. The interest deduction limitation will be effective beginning in 2020.
  • Belgium: In light of the corporate tax reform, companies will need to consider the effects of the tax legislation in determining their deferred tax position under IFRS or U.S. GAAP for the reporting periods closed as of 31 December 2017.

Read TaxNewsFlash-Europe

Americas

  • Jamaica: There are new income tax return forms for 2017, and the filing and payment date is 15 March 2018.
  • Canada: A tax information exchange agreement with the Cook Islands entered into force 18 December 2017.
  • Colombia: Five items may be appropriate for tax reform in 2018, according to tax professionals.
  • Mexico: Guidance reflects tax incentives being made available to encourage electronic payment of taxes and electronic information reporting. 
  • Chile: The KPMG member firm has prepared a Spanish-language report concerning tax and legal news for January 2018.

Read TaxNewsFlash-Americas

Asia Pacific

  • India: A tribunal held that the annual payment of franchise fees, paid to a cricket organization to operate and participate in the Indian Premier League, was a deductible revenue expenditure.
  • India: The Central Board of Direct Taxes announced that a company subject to a corporate insolvency resolution process may use the amount of total loss brought forward (including unabsorbed depreciation) to reduce the book profit for minimum alternate tax purposes.
  • China: To encourage overseas investors to expand their investments in China, certain foreign investors are allowed to defer withholding tax for profit reinvestments made in China.
  • Oman: The 2018 budget was released in January 2018. In general, there are no significant tax provisions, but it is expected that regulations will be issued to implement and clarify recent amendments to the tax law.

Read TaxNewsFlash-Asia Pacific

FATCA / IGA / CRS

  • Germany: The central tax office (BZSt) released guidance for foreign institutions and foreign service providers about the submission of common reporting standard (CRS) returns.
  • Korea: A revised version of regulations was issued for implementing the automatic exchange of financial information with foreign countries (territories) for tax purposes under the CRS and FATCA regimes.
  • Brazil: The deadline for FATCA and CRS returns, related to the second half of 2017, has been extended from February 2018 to the last business day of June 2018.
  • Finland: The tax administration issued an updated version of the CRS and DAC2 guidance that is intended to assist financial institutions, their advisers, and service providers with respect to their due diligence and reporting obligations.
  • France: Updated versions of guidance provide French financial institutions with the technical description and specifications required for the transmission of FATCA and CRS returns.
  • Netherlands: A Dutch release reflects information provided by the U.S. tax authority (IRS) regarding submissions of missing U.S. taxpayer identification numbers (TINs) for certain accounts under the FATCA regime.
  • OECD: An updated version of frequently asked questions (FAQs) has been issued for implementation of the CRS.

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • IRS Notice 1036 updates the withholding tax tables to reflect recent legislative changes, and clarifies that a rate of 22% is the appropriate supplemental flat rate for supplemental wages of $1 million or less.
  • The IRS released two “practice units” titled: U.S. Territories – Self-Employment Tax and Stock Basis Ordering Rules
  • Rev. Rul. 2018-04 revises the “covered compensation” tables for determining the permitted disparity in employer-provided contributions or benefits for the 2018 plan year. For purposes of determining covered compensation for the 2018 year, the taxable wage base is $128,400 (down from $128,700 as first provided by Rev. Rul. 2017-22 in November 2017).
  • An IRS release notes a new mailing address for Form 8809, Application for Extension of Time to File Information Returns, and faxes are no longer accepted.
  • Indiana’s high court held that purchases of freezer equipment and electricity used to “blast-freeze” food qualified for certain sales and use tax exemptions available for manufacturing activities. 
  • The Kansas high court, in a case concerning whether a casino owed use tax on electronic gaming machines that it did not own and could not own, held that the use tax statute was ambiguous and that the taxpayer must own the subject property to be liable for use tax.
  • The Pennsylvania Department of Revenue issued guidance announcing that it would disallow 100% bonus depreciation (as available under newly enacted federal tax law) for assets placed in service after 27 September 2017.

Read TaxNewsFlash-United States

 

  • A new member and new subcommittee chairs for the House tax-writing committee (the Ways and Means Committee) were announced.
  • Senator Sheldon Whitehouse (D-RI) was named to the Senate Finance Committee (the tax-writing committee in the Senate).
  • The Joint Committee on Taxation released a report that provides a list of federal tax provisions that expired or are currently scheduled to expire for the period 2016-2027.

Read TaxNewsFlash-Legislative Updates

 

  • States are starting to address federal tax reform, with lawmakers in California and New York announcing proposals to address one of the key provisions—the elimination of the uncapped state and local tax (SALT) deduction.

Read TaxNewsFlash-Tax Reform

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