KPMG’s Week in Tax: 19 - 23 March 2018 | KPMG | US
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KPMG’s Week in Tax: 19 - 23 March 2018

KPMG’s Week in Tax: 19 - 23 March 2018

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

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Transfer Pricing and BEPS

  • OECD: The Organisation for Economic Cooperation and Development issued additional guidance on the attribution of profits to permanent establishments pursuant to the base erosion and profit shifting (BEPS) Action 7.
  • Nigeria: Proposed country-by-country (CbC) reporting rules would be incorporated as part of the transfer pricing regulations to permit the exchange of information among countries that have signed an agreement for the exchange of corporate information to prevent BEPS.
  • Netherlands: Ratification of the multilateral instrument is pending in the parliament. The multilateral instrument aims to implement tax treaty changes to reflect BEPS measures.
  • Dominican Republic: The tax authority has issued requests to taxpayers that they provide certain documents—including transfer pricing studies—to verify their compliance with guidelines for interest deductibility.

Read TaxNewsFlash-Transfer Pricing

Europe

  • Switzerland: The Federal Council published a dispatch on Tax Proposal 17, the next step in the process. There were no major changes to the content of the reform proposals.
  • EU: The European Commission issued guidelines to address how EU funds can avoid channeling funds through non-cooperative tax jurisdictions (the EU’s “blacklist” of jurisdictions).
  • Germany: A case has been referred to the Court of Justice of the European Union (CJEU) concerning whether outsourced services provided to a bank for the purpose of operating ATMs are exempt from value added tax (VAT).
  • Russia: New VAT rules with respect to business-to-business supplies of e-services provided to Russian customers will be effective under new legislation beginning 1 January 2019.
  • EU: The European Commission issued several proposals on a “fair and effective tax system” in the EU for the digital single market, including: (1) a directive proposal on a digital services tax, (2) a directive proposal on the introduction of a digital permanent establishment concept, and (3) recommendations to EU Member States to implement the digital services tax concept in their networks of income tax treaties. 
  • Serbia: A refund may be available to certain foreign entities for amounts of Serbian value added tax (VAT) charged on supplies of goods and services purchased within Serbia. VAT refund requests must satisfy a threshold amount, and must be filed by 30 June 2018.
  • Spain: An electronic reporting system for VAT purposes was developed by the tax administration. Changes have been made to that electronic reporting system, and modifications are effective 1 July 2018.
  • Ireland: Employers are reminded of Irish legislation that allows for many types of programs to facilitate share allocations or grants of options to buy shares to their employees. 
  • Austria: The Administrative Supreme Court held that a “contribution in kind” of silent partnership interests did not qualify under the beneficial provisions of the tax law on reorganizations in Austria.

Read TaxNewsFlash-Europe

Africa

  • South Africa: A reminder that the increased VAT rate of 15%—effective 1 April 2018—will affect all industries.

Read TaxNewsFlash-Africa

Americas

  • Canada: The British Columbia 2018 budget bill received Royal Assent. There were no changes to the rates of corporate or individual (personal) income tax, but the legislation includes measures affecting corporate tax credits.
  • Canada: The Nova Scotia 2018 budget has been presented. There are no changes to the corporate or individual (personal) income tax rates proposed; however, changes to certain tax credits have been proposed.
  • Brazil: Guidelines have been issued about the appropriate format for the electronic delivery of information and supporting documents.

Read TaxNewsFlash-Americas

FATCA / IGA / CRS

  • Australia: Updated guidance concerns the automatic exchange of information (AEOI) provisions relating to the FATCA and common reporting standard (CRS) regimes.
  • Germany: Guidance for financial institutions and foreign service providers concern current developments with regards to the CRS system in Germany.
  • United States: “Draft FATCA certification questions” were released in an effort to assist responsible officers prepare and complete FATCA certifications.
  • Japan: An updated version of “frequently asked questions” (FAQs) was issued as guidance for Japanese financial institutions concerning the technical description and specification for filing reports under the CRS.

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • The IRS announced taxpayers affected by Hurricane Maria in certain areas of Puerto Rico and the U.S. Virgin Islands have a new return and tax payment deadline of 29 June 2018.
  • Idaho’s second federal tax conformity bill, House Bill 463, was signed into law. Other additional bills on federal tax conformity are pending consideration in the legislature.
  • The Indiana Department of State Revenue in a “letter of findings” concluded that payments received as a result of shared-loss agreements with the Federal Deposit Insurance Corporation (FDIC) were subject to the state’s “financial institutions tax.”
  • A Kentucky appeals court held that a statute barring refunds of the “special fuel tax” to taxpayers that did not hold a valid refund permit at the time of the fuel purchase (a “pre-purchase refund permit”) did not violate the Due Process Clause.
  • The Texas Comptroller ruled that streaming subscription services—i.e., internet-based platforms for viewing real-time and on-demand streaming videos—were subject to sales tax. 
  • The Vermont Department of Taxes issued a technical bulletin summarizing the circumstances under which a foreign business entity is deemed to have Vermont corporate income tax nexus. Physical presence is not required for income tax nexus, according to the technical bulletin.

Read TaxNewsFlash-United States

 

  • The U.S. House of Representatives passed a spending bill that includes tax measures.

Read TaxNewsFlash-Legislative Updates

Trade & Customs

  • United States: President Trump issued an order directing the U.S. Trade Representative to prepare a list of goods imported from China that will be subject to tariffs. The proposed tariffs will total approximately $50 billion, and would address China’s policies concerning technology transfers and intellectual property.
  • Spain: Businesses need to consider the implications of a Court of Justice of the European Union (CJEU) judgment on their import operations, and specifically the customs valuation when transfer pricing valuation is used.
  • United States: The U.S. Court of Appeals for the Federal Circuit affirmed the trade court’s findings about the HTSUS tariff classification of various imported screws.
  • United States: U.S. Customs and Border Protection (CBP) announced a test program concerning the automation of CBP’s bond program (eBond test) will continue “until further notice.”
  • United States: A release from the U.S. Commerce Department addresses the filing of requests for exclusions from tariffs being imposed on certain imports of steel and aluminum.
  • Panama: The Authorized Economic Operator (AEO) program provides opportunities for eligible companies that are able to demonstrate appropriate levels of security in their foreign trade operations.

Read TaxNewsFlash-Trade & Customs

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