KPMG’s Week in Tax: 11-15 April 2016

KPMG’s Week in Tax: 11-15 April 2016

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

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BEPS

  • EU: A proposal in the European Union to require the “public” release by multinational enterprises on a country-by-country basis of the amount of taxes paid and to require public disclosure of relevant tax information relating to transactions in countries that are identified as “tax haven” jurisdictions advanced with official publication by the European Commission. The proposal would require certain multinational companies to publish annually a report disclosing the profit and the tax accrued and paid in each EU Member State on a country-by-country basis. This information would remain available for five years.
  • OECD: Senior tax administration officials from member countries of the Organisation for Economic Cooperation and Development (OECD) convened to discuss opportunities for obtaining data, co-operation and information-sharing in light of the “Panama papers” revelations.
  • South Africa: Draft regulations concern a country-by-country reporting standard for multinational enterprises.

 

Read TaxNewsFlash-BEPS

Transfer Pricing

  • Canada: Guidance confirms the administrative policy that Canadian taxpayers that take part in non-arm's length cross-border transactions and receive Canadian government assistance do not reduce their cost-based transfer price by the amount of the assistance.
  • India: The Bangalore Bench of the Income-tax Appellate Tribunal examined what factors—such as functional comparability—that are to be used and described related-party transaction filters that are to be considered in the selection of comparable companies. The tribunal also applied the benefit of the +/- 5% allowance in the subject case.
  • India: The Mumbai Bench of the Income-tax Appellate Tribunal held that: (1) the selection of a “tested party” is to be made with reference to the entity that has undertaken the transaction; and (2) the rate of interest on related-party debt instruments or other borrowings must be market-determined and at arm’s length and must be reported in the currency in which the loan was made / repaid.

 

Read TaxNewsFlash-Transfer Pricing

Americas

  • Canada: The due date for filing individual (personal) income tax returns for 2015 has been extended to Monday, 2 May 2016.
  • Canada: Certain businesses must pay a federal tax of 10% of net insurance premiums paid or payable if they have purchased insurance coverage outside Canada or were covered under a global insurance policy acquired by a parent company in 2015. The tax is due 30 April 2016.
  • Brazil: There is a newly enacted voluntary disclosure program that provides a pathway for the repatriation of previously undeclared or underreported assets held abroad. The provisions allow taxpayers to declare assets held abroad or to revise incorrect data about their assets.

 

Read TaxNewsFlash-Americas

Asia Pacific

  • New Zealand: The next phase of Inland Revenue’s “business transformation changes”—this time, aimed at business taxation—has been announced. Consultation submissions concerning these proposals are due by 30 May 2016.
  • Australia: For fiscal year 2016, the Australian Taxation Office (ATO) has changed the way employers are required to report employee share scheme (ESS) information. The ATO’s objective is to be able to further automate its processes of reviewing the ESS disclosures that taxpayers make in their returns.

 

Read TaxNewsFlash-Asia Pacific

FATCA / IGA / CRS

  • Australia: The ATO on 7 April 2016 released guidance notes on implementation of the common reporting standard (CRS) in Australia. These guidance notes support the CRS enabling legislation that came into effect on 18 March 2016.
  • India: The Central Board of Direct Taxes (CBDT) issued guidance outlining the registration procedures under the FATCA and CRS regimes.
  • Cayman Islands: Under the information exchange regimes concerning the United Kingdom and the United States, reports may be submitted on or before 10 June 2016 and returns may be reported on or before 8 July 2016 without incurring “adverse consequences.”

 

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • Proposed regulations were released regarding deemed distributions of stock and rights to acquire stock, in an effort to resolve ambiguities concerning the amount and timing of deemed distributions that are or result from adjustments to rights to acquire stock.
  • Notice 2016-30 updates the list of “designated private delivery services” for purposes of the “timely mailing treated as timely filing/paying” rule of section 7502.
  • The U.S. Tax Court held that in a tax deficiency case, the IRS may plead grounds not originally listed in the notice of deficiency, and that this would not violate a uniform approach to judicial review of the IRS administrative action. Also, the Tax Court held that when no trial date has been set and there is ample time for discovery, no prejudice results to the taxpayer from the IRS being allowed to add a “new matter” to its answer to the taxpayer’s petition.

 

Read TaxNewsFlash-United States

  • The Joint Committee on Taxation (JCT) released an explanation of the provisions in H.R. 4891, a bill to make technical corrections to the Internal Revenue Code.

 

Read TaxNewsFlash-Legislative Updates

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