KPMG’s Week in Tax: 8-11 September

KPMG’s Week in Tax: 8-11 September

Among the tax developments reported from the United States this week are the following items:

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  • Congress returned to Washington this week after the August recess and, given the short amount of time available, is expected to confront looming deadlines on a number of high profile issues—including action on the package of tax preference items known as the “tax extenders.”  In addition, there has been considerable talk on Capitol Hill of combining highway funding legislation with a sweeping overhaul of the tax rules affecting multinational businesses, and possibly attaching an “innovation box” regime to the highway funding bill this fall.

     Read TaxNewsFlash-Legislative Updates

 

  • “Practice units” publicly released by the IRS provide guidance for agents about accounting for intangibles and services associated with the outbound sales of tangible property and on the treatment of an inbound liquidation of a foreign corporation into a U.S. corporate shareholder.
  • The U.S. Court of Appeals for the Second Circuit affirmed a Tax Court opinion and a judgment of a federal district court that the “economic substance doctrine” applies to transactions involving foreign tax credits, and thus affirmed the lower courts’ denial of taxpayer claims for foreign tax credits.
  • Final regulations provide rules for determining minimum required contributions for single-employer defined benefit pension plans under section 430, and also address the excise tax imposed for failing to satisfy these minimum funding requirements under section 4971. These final regulations generally provide actuarial guidance.

     Read more at TaxNewsFlash-United States

FATCA developments

  • Panama: While having previously indicated its intentions to enter into an intergovernmental agreement (IGA) with the United States, Panama has yet to sign an IGA. In preparing for implementation of the FATCA regime the KPMG member firm in Panama prepared a report (in Spanish) that examines various items under FATCA.
  • India: Guidance notes with respect to implementation of the reporting requirements under rules 114F to 114H of the Income tax rules—these are the measures implementing the IGA between India and the United States.
  • Cyprus: Guidance for Cypriot financial institutions under the IGA between Cyprus and the United States.

     Read more at TaxNewsFlash-FATCA

International tax news

  • Australia: A decision concerning patents may provide guidance concerning the “tighter” definition of research and development (R&D) under the current tax incentive.
  • New Zealand: The Finance and Expenditure Select Committee of Parliament reported back a tax bill that would allow: (1) research and development (R&D) tax losses for qualifying businesses; and (2) tax deductions for certain currently non-deductible and non-depreciable (“black hole”) R&D expenditures.

     Read more at TaxNewsFlash-Asia Pacific

 

  • Angola: A new law revises the rules for government-backed incentives—including tax relief from certain taxes, as available over a period of years—for investments made in Angola.

     Read more at TaxNewsFlash-Africa

 

  • Canada: The KPMG member firm in Canada provided its annual guide to taxation in Canada.

     Read more at TaxNewsFlash-Americas

 

  • Belgium: Guidance concerning tax deductions and reporting requirements with respect to payments made into “tax haven” jurisdictions, specifically payments made into Luxembourg and Cyprus.

     Read more at TaxNewsFlash-Europe

 

  • India: A tribunal upheld application of the profit split method (PSM) when different activities performed by the taxpayer and its related parties were inextricably linked, and the entities contributed significantly to the value chain of provision of software services to the end-user customer.

     Read more at TaxNewsFlash-Transfer Pricing

 

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

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