KPMG’s Week in Tax: 2-6 May 2016

KPMG’s Week in Tax: 2-6 May 2016

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

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United States

  • Financial reporting changes may affect the calculation and financial reporting for income taxes and other types of taxes, given that the U.S. GAAP rules on revenue recognition have been superseded by the FASB’s revenue standard. 
  • Regulations address a program for certifying professional employer organizations (also known as employee leasing companies).  
  • Rev. Proc. 2016-30 updates the rules and procedures for “pre-filing agreements”—that is, when taxpayers seek an IRS examination and resolution of certain specific issues relating to tax returns before the returns are actually filed. 
  • Puerto Rico’s legislature has moved to repeal the value added tax (VAT) regime enacted in 2015, and scheduled to be effective June 1, 2016.
  • Final regulations were issued concerning the additional limitation on the suspension of benefits applicable to certain pension plans that are in “critical and declining status.” 
  • Regulations were issued to clarify the employment tax treatment of partners in a partnership that owns a disregarded entity and specifically to address the employment tax classification of a disregarded entity owned by the partnership.
  • Notice 2016-31 extends and modifies the safe harbor rules for satisfying a continuity requirement for beginning construction of a qualified facility eligible for the renewable electricity production tax credit under sections 45 and 48.
  • Rev. Proc. 2016-29 aggregates and adds to list of “automatic changes” to which the automatic exchange procedures of Rev. Proc. 2015-13—as clarified and modified—apply. 
  • Rev. Proc. 2016-31 provides temporary relief for certain money market funds (MMFs) that receive contributions from their advisers as the MMFs transition to comply with U.S. Securities and Exchange Commission (SEC) rules that change how certain MMF shares are priced.  
  • Notice 2016-32 concerns the diversification requirements under section 817(h) as applicable to insurance companies, for a segregated asset account that invests in an MMF that is a government MMF. 

 

Read TaxNewsFlash-United States

Americas

  • Canada: The government has launched trade and customs consultations and taken other customs-related actions including: (1) extending the grace period to 1 June 2016, for exporters to make a voluntary disclosure of exports of goods that are trans-shipped through the United States; and (2) phasing out import duty on certain technology products by 1 July 2016.
  • Canada: Newfoundland and Labrador released transitional rules relating to the increase in the rate of the provincial harmonized sales tax (HST) to 15%, effective beginning 1 July 2016.

 

Read TaxNewsFlash-Americas

Asia Pacific

  • Australia: The federal budget was presented on 3 May 2016. Among the tax proposals are measures for a reduced corporate tax rate, a new anti-avoidance measure, and continuation of the research & development (R&D) tax incentive.
  • Korea: New measures aim to simplify certain restructuring procedures for companies in certain industrial sectors. Specific tax support measures, expected to be effective 1 August 2016, are provided for eligible companies involved in a voluntary restructuring.
  • Thailand: A temporary reduction in the rates of individual (personal) income tax in Thailand continues for the 2016 tax year. 

 

Read TaxNewsFlash-Asia Pacific

Europe

  • Hungary: Recent amendments to the accounting rules may affect tax items.
  • EU: A final proposal to deliver a single VAT area is to be agreed and published for 2017. 
  • Germany: Among recent developments concerning the “trade tax,” the Federal Constitutional Court (BVerfG) rejected a request from a lower court, for judicial review of the add-back rules under the trade tax.
  • Italy: New measures extend the reverse-charge mechanism under the VAT regime to the supply of game consoles, tablets, and laptops.

 

Read TaxNewsFlash-Europe

Transfer Pricing

  • Sweden: The Swedish tax agency submitted to the Ministry of Finance a proposal for legislation to implement recommendations under Action 13 of the base erosion and profit shifting (BEPS) project with respect to transfer pricing documentation and the rules for the automatic exchange of country-by-country (CbC) reports.

 

Read TaxNewsFlash-Transfer Pricing

FATCA / IGA / CRS

  • Luxembourg: The tax authorities published a list of “frequently asked questions” (FAQs) concerning implementation of the common reporting standard (CRS).

 

Read TaxNewsFlash-FATCA / IGA / CRS

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