KPMG’s Week in Tax: 5 - 9 December 2016

KPMG’s Week in Tax: 5 - 9 December 2016

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

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United States

  • A report prepared by KPMG LLP provides a high-level overview in a FAQ format about the possible tax reform process in the United States. The report explains steps that businesses may want to consider in preparing for the possibility of tax reform.

Read Understanding the tax reform process—FAQs, executive presentation 

BEPS and Transfer Pricing

  • Australia: The Australian Taxation Office (ATO) issued a list of question and answers (Q&As) regarding country-by-country (CbC) reporting and transfer pricing documentation.
  • Norway: The rules on CbC reporting have been approved by the Norwegian parliament, and will be effective beginning from the fiscal year 2016, with the first reporting to be made before 31 December 2017.
  • OECD: Two new guidance items were released to support the global implementation of CbC reporting under Action 13 of the base erosion and profit shifting (BEPS) project.
  • OECD: Mutual agreement procedure (MAP) statistics for 2015 were released.

Read TaxNewsFlash-BEPS and TaxNewsFlash-Transfer Pricing

Europe

  • France: The French Supreme Tax Court issued a decision clarifying that a November 2016 decree that limits judicial review in situations when a claim is tacitly rejected by the administrative authority, does not apply to tax claims.
  • Greece: New law introduces changes concerning the establishment of companies and the formation of partnerships.
  • Ireland: Research and development (R&D) tax relief is available for various industries including the food and beverage, software, life sciences, and engineering sectors.
  • EU: At this week’s meeting, the Economic and Financial Affairs Council of the EU (ECOFIN) discussed a common (consolidated) corporate tax base, beneficial ownership, hybrid mismatches, and a financial transaction tax.
  • EU: EU Member States failed to reach an agreement on amendments to the hybrid mismatch rules contained in the Anti-Tax Avoidance Directive.
  • Poland: Recently enacted tax legislation revises the corporate income tax rules that apply concerning the taxation of investment funds. The new measures are effective 1 January 2017.
  • Belgium: A draft law introducing a deduction for innovation income has been approved. The text has been sent to the Council of State for advice (and is subject to change).

Read TaxNewsFlash-Europe

FATCA / IGA / CRS

  • Austria: The list of “participating jurisdictions” for the exchange of financial account information in tax matters under the common reporting standard (CRS) regime was released. This list shows 26 participating jurisdictions that are not EU Member States and/or are not on a list of jurisdictions with which the EU has already concluded an agreement.
  • South Africa: The final version of the CRS guide was released in a “frequently asked questions” (FAQ) format.
  • Switzerland: A “final” draft version of guidelines on standard for the automatic exchange of financial account information under the CRS was issued. The draft guidelines are effective 1 January 2017 and are intended to help Swiss financial institutions comply with the requirements of the CRS.
  • India: An updated version of guidance notes intended to help financial institutions and other stakeholders understand and comply with the reporting requirements under the FATCA and CRS regimes was issued.
  • United States: Several FATCA report samples files using FATCA XML Schema v2.0 have been updated.

Read TaxNewsFlash-FATCA / IGA / CRS

Asia Pacific

  • Hong Kong: Investors from mainland China and Hong Kong are allowed to trade stocks on each other’s market through the Shenzen-Hong Kong Stock Connect.

Read TaxNewsFlash-Asia Pacific

Americas

  • Dominican Republic: The tax authority published a regulation to amend certain excise tax provisions generally concerning rules and procedures relating to the manufacture, importation, and exportation of alcoholic beverages and tobacco products.
  • Mexico: Mexico’s high court has resolved taxpayer challenges to find certain information reporting requirements are not in compliance with constitutional principles.

Read TaxNewsFlash-Americas

United States

  • Three sets of regulations—final, temporary, and proposed regulations—concern the taxable income or loss of a taxpayer with respect to a “qualified business unit” (QBU) subject to section 987.
  • Long awaited guidance takes the form of comprehensive proposed regulations interpreting the statutory rules, and temporary regulations that primarily incorporate guidance provided in prior IRS notices addressing dispositions of assets subject to section 901(m)—i.e., concerning foreign tax credits and section 901(m) “covered asset acquisitions.”
  • Rev. Proc. 2016-56 updates prior IRS guidance and adds new countries—Israel, Korea, and St. Lucia—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.
  • U.S. employers face uncertainty with respect to healthcare reform under the incoming administration, with indications that there will be changes relating to healthcare reform and federal regulations, including overtime rules.
  • The Massachusetts Appellate Tax Board concluded that a company’s failure to apply to be classified as a securities corporation (thereby entitling it to preferential corporate excise tax treatment, and not requiring it to be included in the Massachusetts combined group) precluded the company from such beneficial tax treatment.
  • The Portland, Oregon city council is considering an ordinance that, if passed, would impose a surtax on the business license tax liability of certain publicly traded companies, with the revenue to be used to fund social services.
  • Washington State’s Supreme Court held that an electronics distributor was liable for B&O tax on receipts from the sales of products that were delivered to Washington customers from an out-of-state warehouse or that were drop-shipped to Washington addresses (i.e., delivered to a third-party in Washington State at the request of the taxpayer’s customer).
  • The Uniform Law Commission finalized the Revised Uniform Unclaimed Property Act (RUUPA) with commentary, with application for multiple states.

Read TaxNewsFlash-United States

 

  • A tax technical corrections bill has been introduced, with measures clarifying the partnership audit rules, real estate investment trust (REIT) and other real estate-related provisions, and various other tax provisions enacted in 2015. The Joint Committee on Taxation (JCT) released its technical explanation of the provisions in H.R. 6439, the “Tax Technical Corrections Act of 2016.”
  • The Ways and Means Committee of the House of Representatives announced the release of the 2016 version of the “Green Book”—that provides descriptions and current data about health, welfare, retirement, disability, and related programs under the jurisdiction of Ways and Means.
  • The House of Representatives passed by unanimous vote, H.R. 5015, the Combat-Injured Veterans Tax Fairness Act of 2016.

Read TaxNewsFlash-Legislative Updates

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