KPMG’s Week in Tax: 16 - 20 May 2016

KPMG’s Week in Tax: 16 - 20 May 2016

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

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Transfer Pricing

  • Denmark: A new executive order on Danish transfer pricing documentation requirements has been issued to amend the Danish rules. The new transfer pricing documentation requirements appear to be aligned with the base erosion and profit shifting (BEPS) recommendations from the OECD.
  • Austria: The Austrian Ministry of Finance published, for public consultation, draft legislation to implement recommendations under Action 13 of the BEPS initiative on transfer pricing documentation and rules for the automatic exchange of country-by-country reports.
  • Belgium: A draft law that would introduce country-by-country reporting and formal transfer pricing documentation requirements currently is in the process of being finalized.


Read TaxNewsFlash-Transfer Pricing


  • Canada: Prince Edward Island Bill 32 received royal assent on 13 May 2016, and thus enacts certain measures announced in the province's 2016 budget. This legislation does not contain any corporate income tax measures.
  • Peru: Guidance concerns the customs valuation assigned to imported goods and merchandise. It is provided for purposes of verifying the value of imports and is effective 17 May 2016.


Read TaxNewsFlash-Americas

Asia Pacific

Australia: Goods and services tax (GST) business-to-business measures (effective 1 October 2016) may bring foreign businesses into the “GST net” for the first time.

Australia: The government announced incentives for startups and investor-related tax initiatives. 

New Zealand: Proposals for changes to the taxation of employee share scheme (plan) benefits are focused on conditional and “option-like” arrangements.

India: The Delhi High Court held that a payment of administrative fees to a foreign company is not subject to disallowance because of non-withholding (deduction) of tax at source in view of non-discrimination clause under the India-United States income tax treaty.

Singapore: A recently signed income tax treaty between India and Mauritius may have implications for Singapore investors in India—in particular, given the treaty’s shift from a resident-based taxation to a source-based taxation.


Read TaxNewsFlash-Asia Pacific


  • Nigeria: The Federal Inland Revenue Service is focused on tax revenue collection and as part of this effort is conducting value added tax (VAT) and withholding tax monitoring exercises of some companies. 


Read TaxNewsFlash-Africa


  • EU: An anti-tax avoidance draft package includes recommendations for “blacklist” countries.
  • Poland: The Ministry of Finance released a set of “frequently asked questions” (FAQs) about the selection of taxpayers for tax audits, known as the “standard audit file.”
  • United Kingdom: HMRC issued guidance that explains the treatment of royalties for customs proposes. 
  • Portugal: Under a program—Portugal 2020—there are incentives, including ones for research and development, being made available in 2016 for small and medium size enterprises (SMEs). 
  • Bulgaria: The KPMG member firm in Bulgaria prepared a tax reference guide for 2016 that provides tax rates and other items for individual and corporation taxpayers, and provides information about VAT and other indirect taxes.


Read TaxNewsFlash-Europe


  • Australia: Effective from 1 July 2017, financial institutions—including banks—will report to the Australian Taxation Office (ATO) information on accounts held by foreign tax residents. The ATO will begin to exchange foreign resident account information with the participating tax authorities of those non-residents from 2018.


Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • The U.S. Court of Appeals for the Fifth Circuit affirmed penalty determinations made by a federal district court with regard to “sham partnerships,” including the imposition of the gross-valuation misstatement penalty under section 6662.
  • A final rule from the Wage and Hour Division of the U.S. Labor Department revises the minimum wage and overtime pay rules that apply for executive, administrative, professional, outside sales, and computer employees by amending the salary level above which certain white collar workers may be exempt from overtime pay requirements.
  • A revised, updated version of Notice 2016-31 was issued by the IRS with respect to the “beginning construction” rules for a qualified facility eligible for the renewable electricity production tax credit (PTC), or the election to claim the investment tax credit (ITC) in lieu of the PTC under sections 45 and 48.
  • Regulations finalize the rules for disbursements from a designated “Roth account” that is directly rolled over to qualified plans established under section 401(a), section 403(b), or section 457(b).


Read TaxNewsFlash-United States


  • A discussion draft of proposed legislation to modify the taxation of financial derivatives would attempt to unify and simplify the treatment of derivatives by creating one timing rule, one character rule, and one sourcing rule for all derivatives.
  • An anti-inversion bill was introduced targeted at limiting the use of planning techniques often employed in conjunction with corporate inversion transactions.
  • The Senate Finance Committee held a hearing to examine corporate integration, with a specific focus on the possibility of allowing corporations to deduct dividends paid.
  • The House of Representatives passed a bill—H.R. 3832—that contains provisions related to identity theft, such as increased notification to victims, increased penalties for the use of a false identity, and increased ability for tax fraud victims to prevent the processing of electronic returns.


Read TaxNewsFlash-Legislative Updates

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