KPMG’s Week in Tax: 19-23 October

KPMG’s Week in Tax: 19-23 October

The European Commission this week announced its decision, concluding that Luxembourg and the Netherlands had granted “illegal” selective tax advantages to multinational corporate entities, by means of tax rulings or comfort letters issued to the taxpayer companies. The EC found the tax rulings at issue endorsed “artificial and complex methods” to establish taxable profits for the companies; and that this did not reflect “economic reality” because the rulings set transfer prices for goods and services sold between member companies of the two corporate groups—prices that did not correspond to market conditions. The EC stated that because of the tax rulings, most of the profits of one multinational corporation were shifted abroad, to jurisdictions where they were not taxed, and the other corporation only paid taxes on underestimated profits.

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The EC’s findings may have implications for other transfer pricing-related rulings, and the EC is continuing investigations of tax rulings issued to multinational entities by the tax authorities in Belgium, Ireland, and Luxembourg.

India: The Central Board of Direct Taxes (CBDT) issued guidance for Assessing Officers and Transfer Pricing Officers regarding the administration of transfer pricing assessments; the CBDT published final rules for the use of range and multiple year data. 

Read TaxNewsFlash-Transfer Pricing


Countries continue to implement recommendations under the OECD’s base erosion and profit shifting (BEPS) project. The Luxembourg government submitted draft legislative proposals to Parliament—legislation that, if enacted, would both implement certain provisions of the OECD’s BEPS actions and provide for certain EU-compliant measures. The proposals also would be intended to improve the competitiveness of the Luxembourg tax system. 

Read TaxNewsFlash-BEPS

Other tax news

  • New Zealand: A bill that would impose tax on certain residential land transactions, for property acquired on or after 1 October 2015, if the property is sold within two years of the registration date, has completed the Parliamentary stages and is pending enactment. 

Read TaxNewsFlash-Asia Pacific


  • Italy: A new “tax ruling” system—under which, taxpayers may request a ruling from the tax authorities as to the tax treatment of a transaction or an interpretation of the tax laws—will be effective beginning in 2016. 
  • Gibraltar: Effective for accounting periods beginning in 2016, a change to the tax rules requires that all companies registered in Gibraltar must submit a tax return—not just those companies with assessable income. 

Read TaxNewsFlash-Europe

United States

  • The IRS released an advance version of Notice 2015-73, clarifying the types of transactions that are “basket options” and that are to be treated as “listed transactions” that must be disclosed, and an advance version of Notice 2015-74, clarifying the types of transactions that are “basket contracts” and that are to be treated as “transactions of interest” that must be disclosed. 
  • The Treasury Department and IRS released a notice of proposed rulemaking concerning the definition of married couples for federal tax purposes. The proposed regulations would implement rules reflecting recent decisions of the U.S. Supreme Court concerning same-sex marriage. 
  • The IRS released the annual revenue procedure that sets forth the dollar amounts for more than two dozen tax provisions as adjusted for inflation for 2016, and issued a release concerning the inflation adjustments related to pension plans.


  • Cayman Islands: The Common Reporting Standard (CRS) regulations were published, and are made part of the Cayman Islands law.
  • United States: The Treasury Department reported the signing of an intergovernmental agreement (IGA) with Algeria.

Read TaxNewsFlash-FATCA


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

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