KPMG’s Week in Tax: 16 - 20 April 2018 | KPMG | US
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KPMG’s Week in Tax: 16 - 20 April 2018

KPMG’s Week in Tax: 16 - 20 April 2018

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

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Transfer Pricing

  • Denmark: A landmark transfer pricing decision by the Eastern High Court that holds, in part, that transfer pricing documentation must be prepared contemporaneously, has compliance implications for companies operating in Denmark.
  • Poland: A transfer pricing forum considered practical problems and challenges related to benchmarking analyses and proposals for a simplified procedure for concluding advance pricing agreements (APAs).

Read TaxNewsFlash-Transfer Pricing

BEPS

  • OECD: A draft practice note intends to help developing countries address base erosion and profit shifting (BEPS) challenges in raising revenue from the mining sectors.

Read TaxNewsFlash-BEPS

Europe

  • Czech Republic: The Ministry of Finance released for public comments a draft amendment to the law on the electronic reporting of sales and to the value added tax (VAT) law. In general, the effective date would be 1 January 2019 (except for certain provisions).
  • Germany: The Ministry of Finance’s position concerning the VAT treatment of bitcoin and other “virtual currencies” was set forth in guidance.
  • Sweden: There are not significant tax proposals in the Spring tax bill. A proposal concerning limiting the use of interest deductions, to bring parity on debt and equity financing of corporations, was postponed.
  • EU: A report from KPMG’s EU Tax Centre summarizes recent Court of Justice of the European Union (CJEU) judgments, state aid proceedings, and rulings from the EC and other institutions.
  • Finland: A Finnish court referred an issue to the CJEU and requested a preliminary ruling on the location of risk for insurance premium tax purposes.
  • Luxembourg: Legislation that would affect the VAT grouping rules is proposed to be effective 31 July 2018.
  • Netherlands: A draft decree under the anti-money laundering law includes proposed guidance for “ultimate beneficial owner” registration. 

Read TaxNewsFlash-Europe

Africa

  • Nigeria: A voluntary asset and income tax amnesty program has been extended. The new deadline is 30 June 2018 (previously 31 March 2018).

Read TaxNewsFlash-Africa

Americas

  • Canada: British Columbia announced new exceptions from the real estate speculation tax (proposed in the 2018 provincial budget). Other real estate tax changes announced in the budget are now in effect.
  • Brazil: A new tax compliance program between taxpayers and São Paulo state specifically applies to ICMS (a state-level sales tax) and is intended to foster an environment of mutual trust between taxpayers and the tax authorities that, in turn, will encourage self-regulation, reduce tax compliance costs, and improve communications. 

Read TaxNewsFlash-Americas

Asia Pacific

  • Singapore: Goods and services tax (GST) changes in the 2018 budget include: (1) a rate increase from 7% to 9% at some time during the period from 2021 to 2025: and (2) GST would be imposed on all services consumed in Singapore, effective 1 January 2020.
  • Australia: The research and development (R&D) tax incentive registration deadline for companies with a 30 June 2017 year end is 30 April 2018.
  • Hong Kong: A two-tier profits tax regime—effective from year of assessment 2018/2019—has been enacted and applies to both corporations and unincorporated businesses.

Read TaxNewsFlash-Asia Pacific

FATCA / IGA / CRS

  • Czech Republic: Pending legislation would expand the information reporting requirements for banks and would impose requirements on attorneys and tax advisors.
  • Hungary: An updated version of technical guidance provides general guidelines for the preparation and submission of FATCA reports for the 2018 tax year.
  • OECD: An OECD release addresses potential situations when citizenship or residency is arranged so as to result in a challenge to accurate common reporting standard (CRS) compliance.
  • Switzerland: An updated version of questions and answers (Q&As) provides further explanation on matters relating to the automatic exchange of financial account information (AEOI) implementation under the FATCA and CRS regimes.
  • Switzerland: An updated version of the CRS technical guidance provides Swiss financial institutions with the technical descriptions and specifications required for the transmission of CRS returns.
  • Singapore: The FATCA paper (hardcopy) “nil return” for the reporting year 2017 is available for download on the tax authority’s website.

Read TaxNewsFlash-FATCA / IGA / CRS

Trade & Customs

  • United States: U.S. Customs and Border Protection (CBP) announced that with reinstatement of the Generalized System of Preferences (GSP) program: (1) claims for GSP duty-free treatment for merchandise are being accepted with retroactive effect; and (2) customs duties paid on GSP-eligible merchandise that was entered during the period that the GSP program had lapsed will be refunded.
  • New Zealand: Customs legislation pending in New Zealand would change the rules for applying post-import adjustments (such as year-end transfer pricing adjustments). The expected effective date would be 1 October 2018.

Read TaxNewsFlash-Trade & Customs

United States

  • The U.S. Securities and Exchange Commission (SEC) approved a proposal for a “best interest” standard for broker-dealers to apply with respect to retail customers on recommending a securities transaction or an investment strategy involving securities.
  • Treasury’s Community Development Financial Institutions (CDFI) Fund updated the list of opportunity zone designations pursuant to measures in the new tax law. The list now includes Alabama, Delaware, Missouri, Ohio, Texas, and the Northern Marianas Islands.
  • The U.S. Supreme Court heard oral arguments in a case concerning sales and use tax when there are remote or electronic sales. In this case, South Dakota asked the Court to revisit and abrogate the physical presence nexus requirement that was upheld in Quill v. North Dakota.
  • A Treasury Department notice provides the 2018 inflation adjustment factor and reference prices used in determining the availability of the credit for renewable electricity production and refined coal production under section 45.
  • Rev. Proc. 2018-25 provides the annual depreciation limitations (or lease inclusion amounts) for passenger automobiles, including trucks and vans, first placed in service in calendar year 2018. 
  • Notice 2018-38 reminds that with enactment of the new tax law in December 2017, U.S. corporations that use a fiscal year (and not a calendar year) for federal income tax purposes will pay a “blended” rate of federal corporate income tax (that is, a blend of the rate under the old law and the flat rate of 21% under the new law).
  • Arizona House Bill 2647 was enacted and updates the state’s conformity to the Internal Revenue Code. 
  • The Connecticut Department of Revenue Services released guidance explaining how corporate and individual taxpayers are to treat and report mandatory repatriation amounts required to be included in income under IRC section 965.
  • The Indiana Department of Revenue issued a “letter of findings” concluding a taxpayer failed to prove that it lacked “exclusive control” over rented scaffolding, and thus found the taxpayer owed use tax on rentals of scaffolding systems.
  • A New Mexico hearing officer ruled that a taxpayer filing a consolidated return in the state was not allowed a dividends-received deduction or otherwise allowed to exclude dividends and Subpart F income received from more than 50% owned controlled foreign corporations.

Read TaxNewsFlash-United States

 

  • The U.S. House of Representatives approved a number of bills related to IRS administration and taxpayer protections. The bills will next be transmitted to the Senate but it is not clear whether or when the Senate would consider the bills.

Read TaxNewsFlash-Legislative Updates

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