KPMG’s Week in Tax: 30 January - 3 February 2017

KPMG’s Week in Tax: 30 January - 3 February 2017

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

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Asia Pacific

  • India: The Union Budget 2017-2018 was presented 1 February 2017, and includes tax provisions.
  • Australia: The Australian Taxation Office released an update to a guide for effective tax governance, establishing a new approach to tax with specific guidance for board of directors’ attention.
  • Australia: The federal government introduced a proposed framework for limited partnership collective investment vehicles.
  • Thailand: The cabinet approved a proposal to amend the Labor Protection Act with regard to determination of minimum wage, submission of employer’s work rules, and retirement.

Read TaxNewsFlash-Asia Pacific

BEPS and Transfer Pricing

  • OECD: Documents forming the basis of minimum standards for peer review under base erosion and profit shifting (BEPS) Action 13 on country-by-country reporting and BEPS Action 5 on the transparency framework were released.

Read TaxNewsFlash-BEPS and TaxNewsFlash-Transfer Pricing

Americas

  • Canada: Alberta is accepting applications from investors for two new investment tax credit programs—the capital investment tax credit and the Alberta investor tax credit.
  • Canada: A reminder that the federal government and certain provincial governments impose a special tax on insurance premiums.
  • Panama: A customs court has been established, to replace the tariff commission.
  • Panama: Benefits available to companies registered with the Official Registry of the National Industry are extended to certain other companies, including those that have government contracts.
  • Panama: A regime allows for a percentage of “processing goods” (goods imported for processing and, once that is completed, then exported) to be imported without being subject to the normal rules for customs duties.

Read TaxNewsFlash-Americas

Europe

  • Netherlands: A bill would establish a central register of shareholders, where information about shareholders and their shares would be recorded. The tax authorities would have access to this registry.
  • Romania: Changes have been made to the value added tax (VAT) registration procedure.
  • Germany: Legislation that would be intended to counter “harmful tax practices” in connection with the tax treatment of the licensing of rights has been introduced.
  • Sweden: The Council for Advance Tax Rulings (Skatterättsnämnd) decided that earlier, more restrictive precedence from 1993 applies in determining whether a company director’s fees may be "invoiced" by a private limited company. The matter is pending an appeal, and therefore is uncertain. 
  • Switzerland: A referendum vote scheduled for 12 February 2017 will allow the voters to decide whether changes to the Swiss tax system—the Corporate Tax Reform III—will replace special tax regimes for holding companies, mixed companies, and domiciliary companies with new tax treatment.
  • Ireland: Amendments may affect the ability of many foreign employers to avoid the operation of the Irish “pay as you earn” (PAYE) system for employees performing duties on a short term basis.
  • Serbia: The deadline for filing individual (personal) income tax returns, for the year 2016, is 15 May 2017.

Read TaxNewsFlash-Europe

FATCA / IGA / CRS

  • British Virgin Islands: The BVI Financial Account Reporting System (BVIFARS) will not be available until 15 February 2017.
  • Sweden: Technical guidance (a user guide) is intended to help financial institutions with completing their common reporting standard (CRS) reporting obligations for the 2016 calendar year. 

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • The IRS’s Large Business & International (LB&I) division released information on 13 different “campaigns” and, in some instances, identified a variety of “tailored treatments” designed to improve tax compliance by business taxpayers. There is also a new method for audits of large corporate taxpayers.
  • A report discusses how section 987 regulations—issued in December 2016—can significantly affect how a company measures taxable income of a foreign branch with a functional currency different from its owner.
  • President Trump signed an Executive Order to reduce regulations and to control “regulatory costs.”
  • IRS “practice units” (guidance for IRS personnel) were publicly issued concerning: (1) exchange gains/losses on payables and receivables denominated in a nonfunctional currency; (2) official versus free market exchange rate; (3) sourcing of exchange gains or losses in currency transactions; (4) how to assess penalties for failure to file Form 8886 disclosing section 988 losses; and (5) using a section 6038A summons when a U.S. corporation is 25% foreign owned.
  • Arizona’s tax court held that fuel trucks, directly used in mining, were exempt from the “transaction privilege tax.” 
  • The Arkansas legislature is considering a bill that would affect unclaimed property reporting and remittance procedures for certain types of securities-related property. 
  • Michigan’s Supreme Court declined to review a decision of an appellate court that invalidated guidance from the Michigan Treasury Department—specifically guidance concerning the ownership test applied in determining when entities are included in a unitary group.
  • Legislation in Nebraska has been proposed that would transpose into state law, the “Revised Uniform Unclaimed Property Act.”
  • A bill being considered in South Dakota would affect unclaimed property reporting and remittance procedures for certain types of securities-related property. 
  • Certain states—Minnesota, Rhode Island, and Connecticut—have proposed to adopt and impose a surtax that would apply to a corporation’s state corporate income tax liability subject to the SEC’s pay-ratio reporting requirements.

Read TaxNewsFlash-United States

 

  • Republican members of the Senate Finance Committee voted to approve Steven Mnuchin to be Secretary of the Treasury and Rep. Tom Price to be Secretary of Health and Human Services.
  • The Joint Committee on Taxation (JCT) released estimates of federal tax expenditures for fiscal years 2016-2020.
  • The JCT released the “bluebook” for 2016—a description of the tax legislation enacted in 2016.

Read TaxNewsFlash-Legislative Updates

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