KPMG’s Week in Tax: 28 March - 1 April 2016 | KPMG | GLOBAL

KPMG’s Week in Tax: 28 March - 1 April 2016

KPMG’s Week in Tax: 28 March - 1 April 2016

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


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Asia Pacific

  • Australia: New legislation, as introduced into Parliament, would provide tax incentives for individuals who invest in start-up innovation companies. 
  • Japan: The 2016 tax reform bills were passed by the National Diet, and among the measures are provisions that provide for a reduction in the effective rate of corporate tax for certain corporations, changes to limitation rules for deductible tax losses, and revisions to the transfer pricing documentation rules. 
  • Japan: The effective tax rates for certain large companies in Tokyo will be reduced, given the 2016 tax reform and amendments to the Tokyo business tax rates.
  • Singapore: Tax measures in Singapore’s budget for 2016 focus in part on small and medium sized enterprises (SMEs). While the focus is outside the scope of rules for large multinational companies, the approach is “sector-focused.” 
  • Vietnam: Guidance addresses how to determine the exchange rates with respect to accounting for foreign currency transactions and for converting monetary items denominated in a foreign currency.
  • Vietnam: The tax authorities issued guidance addressing tax treatment concerning corporate tax incentives and updating value added tax (VAT) provisions.


Read TaxNewsFlash-Asia Pacific


  • Nigeria: The Tax Appeal Tribunal (Lagos) held that VAT applies to satellite-network bandwidth capacities provided to a Nigerian taxpayer from outside Nigeria by a Netherlands-based non-resident company. The tribunal concluded that bandwidth capacities were not specifically exempted from VAT under the Nigerian VAT law. 


Read TaxNewsFlash-Africa


  • Brazil: New law provides for a change to the rates of taxation of capital gains realized by individual taxpayers in Brazil. Previously, the rate of tax was 15%. Under the new rules, capital gains are subject to taxation at progressive rates based on the amount realized.
  • Canada: New Brunswick announced that it will decrease its small business income tax rate to 3.5% (from 4%), effective 1 April 2016.
  • Canada: Certain indirect tax—GST/HST—changes proposed in the 2016 federal budget may affect charities and entities in the healthcare sector, taxpayers in the real estate sector, and financial services sector taxpayers.


Read TaxNewsFlash-Americas


  • Poland: The Ministry of Finance issued drafts of amendments to the corporate income tax law and to the individual (personal) income tax law that would be effective as of 1 January 2017. 
  • Austria: Beginning 1 April 2016, tax payments must be remitted electronically, and the tax authority will no longer use paper notices or paper communications with taxpayers. Also, there is a possible withholding tax liability for dividends paid abroad if appropriate forms are not filed, and draft guidance has been issued concerning corporate reorganizations, and the effects of accumulate profits and losses.
  • Bulgaria: Companies have been contacted by the tax authorities about the tax and VAT treatment of goods and services provided for the personal use of the company owners and employees.  
  • Kosovo: The Ministry of Finance issued guidance to implement corporate and individual (personal) income tax law changes enacted in 2015.
  • Switzerland: Voters in Geneva effectively agreed to allow “tax holidays”—an exemption from cantonal and communal taxes on profit and capital, for a period ranging from five years to 10 years—to continue.
  • Switzerland: Voters in the canton of Vaud voted in favor of a reduction to the corporate profit tax rate applicable for companies The corporate tax rate, currently set at 22.33%, would be reduced to 13.79%, with the rate reduction expected to be effective by 2019. 


Read TaxNewsFlash-Europe

Transfer Pricing

  • United States: An IRS announcement provides an annual report on the advance pricing and mutual agreement (APMA) program for 2015 and that contains advance pricing agreement (APA) statistics for 2015. During 2015, the IRS executed 110 APAs, which is up from the 101 APAs executed in 2014.
  • Korea: Templates of the “master file” and “local file” have been released under the tax law changes that require certain taxpayers to report information about their transactions with cross-border related parties. 
  • UK: Finance (No. 2) Bill 2016 includes measures to incorporate a number of the OECD’s base erosion and profit shifting (BEPS) recommendations. 


Read TaxNewsFlash-Transfer Pricing


  • Portugal: The FATCA reporting deadline for Portuguese financial institutions has been extended to 30 June 2016.
  • United States: The IRS announced a change to the process for encrypted data packets, and all users will be required to make future transmissions of data packets using the cipher block chaining (CBC) cipher mode.  
  • Vietnam: Financial institutions are to complete their reporting under the FATCA regime for the year 2015 by 30 June 2016. However, an extension of time may be allowed, provided that the extension request was timely filed. 


Read TaxNewsFlash-FATCA / IGA/ CRS

Trade & Customs

  • United States: U.S. Customs and Border Protection (CBP) announced a pilot test program concerning electronic transmissions of certain import data for all FDA-regulated commodities through the Automated Commercial Environment (ACE) has been finalized and approved.
  • EU: Businesses in the EU need to be aware that not all sanctions have been lifted against Iran, and that certain U.S. “primary sanctions” remain in force. 
  • China: China’s customs administration launched an electronic data exchange interface for the customs pre-input system. Customs also issued guidelines with respect to the exemption of import taxes on charity donation materials.


Read TaxNewsFlash-Trade & Customs

United States

  • Rev. Proc. 2016-18: The IRS updated prior guidance to add new countries—Azerbaijan, Jamaica, and the Slovak Republic—to the list of countries with which the IRS and Treasury have determined that it is appropriate to have an “automatic exchange” relationship for purposes of reporting payments of deposit interest of $10 or more made by U.S. financial institutions to nonresident alien individuals. 
  • Puerto Rico: A federal district court concluded that certain legislative changes made under Act 72 to the commonwealth’s minimum alternative corporate income tax (or AMT) regime—in this instance, subsections adding new graduated rates for the AMT’s tangible-property tax and affecting the expenses tax in the Puerto Rico tax law—were in violation of federal constitutional and statutory law. An injunction was issued.
  • Proposed regulations: Updated guidance concerning the retailer’s excise tax imposed on highway-type tractor, trailer, and truck chassis and bodies (“taxable vehicles”) and the manufacturer’s excise tax imposed on taxable tires will affect manufacturers, producers, importers, dealers, retailers, and users of taxable vehicles and taxable tires. 


Read TaxNewsFlash-United States

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