KPMG’s Week in Tax: 24-28 August

KPMG’s Week in Tax: 24-28 August

U.S. tax developments reported this week include the following:


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  • The chairmen of the congressional tax writing committees wrote to the Treasury Secretary, expressing their concerns about a regulatory project that would implement country-by-country reporting, generally in line with an action under the OECD’s base erosion and profit shifting (BEPS) project.
  • Temporary regulations, and by cross-reference, proposed regulations released under section 199 address the qualified production activities income—QPAI—and the W-2 wage limitation for taxpayers with a short tax year.
  • New Jersey Tax Court held that an intangible holding company was not immune from filing corporation business tax return when an affiliate added back royalties. 
  • Proposed regulations would amend existing regulations used in determining whether an individual is a bona fide resident of a U.S. territory.
  • A provision in the D.C. budget support legislation expands the definition of “tax haven” for purposes of the water’s-edge combined group rules, and lists 39 jurisdictions as “tax havens.” 
  • Rev. Proc. 2015-42 provides the domestic asset / liability percentages and domestic investment yields needed by foreign life insurance companies and by foreign property and liability insurance companies to compute their minimum effectively connected net investment income.

Read TaxNewsFlash-United States

FATCA developments

  • US: The IRS updated a list of “frequently asked questions” (FAQs) concerning branch registration under the FATCA regime.
  • India: The deadline for FATCA reporting by Indian financial institutions has been extended to 10 September 2015.
  • Cayman Islands: The FATCA AEOI Portal will close on 28 August 2015. 

Read TaxNewsFlash-FATCA

International tax news

  • Japan: The Supreme Court held that a limited partnership formed under the laws of the U.S. state of Delaware would be treated as a corporation for Japanese tax purposes. Read TaxNewsFlash-Asia Pacific
  • Chile: The tax administration provided a form (Form 1921) that must be filed by foreign investors to report the indirect sale of assets located in Chile—that is, asset sales that are subject to taxation according to the provisions of the Chilean income tax law. Broadly, these measures apply with respect to restructuring or upper tier sales of entities that indirectly hold Chilean assets. The deadline for filing Form 1921 for transactions occurring between 1 January 2013 and 5 August 2015, is 30 October 2015. Read TaxNewsFlash-Americas
  • Luxembourg: A circular provides guidance and rules for issuing certificates of tax residence and access to application of income tax treaty provisions for the avoidance of double taxation for Luxembourg “undertakings for collective investment” or UCIs. Read TaxNewsFlash-Europe
  • South Africa: Proposed legislation includes measures that would change the rules for the tax treatment of government grants, and specifically that would align this tax treatment with the rules provided for public private partnerships. Read TaxNewsFlash-Africa
  • Vietnam: Tax authority official letters provide, among other guidance, that foreign individuals providing services in Vietnam constitute a permanent establishment and are not entitled to certain tax treaty benefits. Other official letters concerns areas of corporate income tax, value added tax (VAT) inputs, and customs duty on imports and exports. Read TaxNewsFlash-Asia Pacific
  • Ecuador: A resolution establishes the standards relating to transactions between related parties, and specifically for the purpose of determining the threshold for claiming deductions of amounts paid as royalties or paid for technical, administrative, consulting, and similar services. Deductions may be limited to 20% under this rule. Read TaxNewsFlash-Transfer Pricing

Read these and other items reported this week at the TaxNewsFlash United States and Global websites.

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