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

KPMG’s Week in Tax: 16 - 20 July 2018

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

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Transfer Pricing

  • Netherlands: An OECD discussion draft on the transfer pricing of financial transactions appears to reflect the position of Dutch transfer pricing guidance issued in April 2018.
  • United States: A report from KPMG considers how multinational entities (especially small to midsized ones) may need to take a fresh look at their transfer pricing policies to avail themselves of some of the new planning opportunities arising from the new tax law.
  • India: The Central Board of Direct Taxes agreed to a “substantive revision” of an India-UK bilateral advance pricing agreement (APA) due to certain changes in the way a particular transaction was being conducted. This is reportedly the first such revision to an existing APA.

Read TaxNewsFlash-Transfer Pricing

Trade & Customs

  • EU: The European Commission announced provisional safeguard measures concerning imports of a number of steel products intended to address the diversion of steel from other countries to the EU market as a result of the recently imposed U.S. tariffs. The safeguard measures will be effective 19 July 2018. Traditional imports of steel products will not be affected.
  • United States: Customs and Border Protection (CBP) released test data that may be used with respect to product exclusions related to section 232 of the Trade Expansion Act of 1962 (that is, concerning the additional U.S. customs duty on imports of steel and aluminum articles). A Ways and Means hearing has been scheduled to consider the product exclusion process.
  • United States: The Office of the U.S. Trade Representative (USTR) announced the United States has launched separate disputes at the World Trade Organization (WTO) against China, the European Union, Canada, Mexico, and Turkey, challenging the tariffs each WTO member imposed in response to U.S. tariff actions on imports of steel and aluminum.
  • United States: A notice from the USTR regards the additional tariffs proposed for imports from China under Section 301 of the Trade Act of 1974.

Read TaxNewsFlash-Trade & Customs

FATCA / IGA / CRS

  • Canada: The Canada Revenue Agency announced changes to the XML schema for filing certain information returns in 2019 related to the U.S. FATCA regime.

Read TaxNewsFlash-FATCA / IGA / CRS

Africa

  • South Africa: Proposed changes to the controlled foreign company (CFC) rules would address instances when a South African resident individual has an indirect interest in a foreign company through a foreign trust (thus conforming to the rule applicable for companies). Comments are due by 16 August 2018.
  • Nigeria: The Federal Ministry of Interior announced that its online processing of business applications will now begin 3 September 2018.
  • Nigeria: The Tax Appeal Tribunal has been reorganised to reflect the six geopolitical zones in Nigeria (in addition to Lagos and Abuja). Taxpayers seeking review of rulings by any tax authority in Nigeria now have an option to seek judicial review by the tribunal.

Read TaxNewsFlash-Africa

Americas

  • Canada: There is new guidance in British Columbia on the upcoming employer health tax. There is an exemption for charities and non-profit employers in specific locations that have a payroll of $1.5 million* or less.
  • Canada: New measures in Quebec will align the tax measures in the province with federal tax legislation.
  • Colombia: A new entity—commercial benefit and interest societies (Sociedades Comerciales de Beneficio e Interés Colectivo (BIC))—has been added to the list of legal organizations in Colombia.
  • Mexico: According to the projections of the Bank of Mexico, the rate of inflation for 2018 could be between 4.5% and 5%, and the gross domestic product could increase 2.5%. Corporate management of Mexican entities may want to consider the implications of these projections on their tax situations.
  • Barbados: Changes to the tax system in Barbados include measures relating to licenses issued to international businesses.


* $ = Canadian dollar

Read TaxNewsFlash-Americas

Asia Pacific

  • India: The Authority for Advance Rulings (AAR) found that a global payment solution provider company had a permanent establishment (PE) in India because the applicant (the regional headquarters for Asia Pacific, Africa, and Middle East) had a processor and network belonging to the corporate group that constituted a fixed-place PE under the India-Singapore income tax treaty.  
  • India: The Central Board of Direct Taxes issued a circular to revise the monetary limits and conditions for the filing of appeals by the tax department in tribunal, high court, or Supreme Court cases.
  • India: A tribunal held that the “limitation of relief” provisions under Article 24 of the India-Singapore income tax treaty do not apply to capital gain derived from the sale of shares, debt instruments, and derivatives of an Indian company.
  • Australia: The Federal Court found that in determining an entitlement to any delayed refund interest, the relevant date in calculating the interest owing was when the entitlement to a refund arose (in this case, earlier than when the taxpayer gave notice of the overpayment of goods and services tax (GST)).
  • New Zealand: Draft legislation concerning a new research and development (R&D) tax credit is expected in September 2018, now that the period for submissions has closed.
  • Vietnam: A decree concerning the treatment of commercial promotions is effective 15 July 2018.

Read TaxNewsFlash-Asia Pacific

Europe

  • Serbia: Changes made by “rulebooks” concerning the value added tax (VAT) law and the customs duties on imports of equipment were published in the official gazette and were effective at the end of June 2018.
  • Germany: A draft law—scheduled to be effective 1 January 2019—would potentially hold online marketplaces liable for VAT on the supplies of goods made by online traders if such traders are not registered for VAT purposes in Germany. 
  • Malta: New rules introduce a flat 15% tax on employment income for individuals operating in maritime, offshore oil and gas industries.

Read TaxNewsFlash-Europe

United States

  • Proposed regulations relating to the “transition tax” under section 965 are expected. The regulations were received 13 July 2018 by OMB’s Office of Information and Regulatory Affairs (OIRA).
  • Several U.S. states issued statements and guidance or otherwise responded to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. concerning the taxation of remote sales.
  • San Francisco’s voters passed a ballot measure for a commercial rents tax to be imposed on gross receipts from leasing or subleasing commercial real estate in the city. 
  • Missouri’s governor signed legislation that changes the taxation of banks, thrifts, and credit institutions.  
  • New tax law in New Jersey requires that a tax amnesty program be established in the coming months.

Read TaxNewsFlash-United States

 

  • The U.S. House Ways and Means Committee approved a bill concerning the retirement plans of single-employer community newspapers.

Read TaxNewsFlash-Legislative Updates

Exempt Organizations

  • Rev. Proc. 2018-38 modifies the information to be reported to the IRS by organizations exempt from tax under section 501(a). The names and addresses of donors would no longer be required on the annual Form 990 or Form 990-EZ information return.

Read TaxNewsFlash-Exempt Organizations

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