KPMG’s Week in Tax: 1 - 5 May 2017 | KPMG | GLOBAL

KPMG’s Week in Tax: 1 - 5 May 2017

KPMG’s Week in Tax: 1 - 5 May 2017

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

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BEPS and Transfer Pricing

  • OECD: Activations of “automatic exchange relationships” have been described by the OECD—another important step in implementing country-by-country (CbC) reporting in accordance with the BEPS Action 13 minimum standard the Multilateral Competent Authority Agreement (MCAA) on the exchange of CbC reports.

 

Read TaxNewsFlash-BEPS and TaxNewsFlash-Transfer Pricing

Americas

  • Canada: The Canada Revenue Agency’s prescribed income tax interest rates remain unchanged, while the prescribed interest rate used to determine interest income inclusion from a pertinent loan or indebtedness (PLOI) increased for the third quarter of 2017.
  • Costa Rica: Guidance allows for the issuance of electronic invoices in languages other than Spanish; and valuation of merchandise and goods and services in currencies other than Costa Rican colones.

 

Read TaxNewsFlash-Americas

Asia Pacific

  • Australia: Stamp duty and land tax changes were proposed in the Victoria and Northern Territory budgets.
  • Hong Kong: A concessionary tax regime for certain aircraft leasing activities was introduced, aiming to make Hong Kong more economically competitive with other leasing locations.

 

Read TaxNewsFlash-Asia Pacific

Europe

  • Luxembourg: The Court of Justice of the European Union (CJEU) issued a judgment effectively concluding the rules for the value added tax (VAT) exemption in Luxembourg relating to services provided by groups to their members are not compliant with the VAT Directive.
  • OECD: Guidelines set forth internationally agreed principles and standards for VAT and goods and services tax (GST) with respect to cross-border services such as the destination principle and for achieving tax neutrality.
  • Austria v. Germany: A CJEU Advocate General concluded that “interest” and the phrase “income from … debt-claims with participation in profits” used in the convention for the avoidance of double taxation with respect to income and capital  must be interpreted autonomously in the context of international treaties, and not by reference to the national law of the source state.
  • Germany: A proposal aims to clarify the rules when a binding ruling affects several taxpayers—for example, a tax group or in instances of a uniform assessment of the profit regarding the partners of a partnership. 
  • Germany: Decisions from the federal tax court concern: (1) income from the waiver of repayment of a loan taken out to purchase real property; (2) “banking privilege” exemption; and (3) the foreign transactions law. A lower court issued a decision concerning off-balance sheet adjustment when a company changes its legal form from a corporation to a partnership.
  • Italy: A “law decree” amends the Italian patent box regime by excluding (removing) trademarks from the list of qualifying intangible assets that may be eligible for the tax benefits under the patent box regime.
  • Sweden: A new tax imposes a “chemical tax” on chemicals associated with or used within certain electronic products that are sold in or brought into Sweden, effective 1 July 2017.
  • Belgium: A CJEU Advocate General concluded that a one-year holding period requirement must be met concerning the deduction of interest payments.
  • Poland: The Ministry of Finance published information concerning the verification of VAT returns submitted using a software tool known as “JPK_VAT verification.”

 

Read TaxNewsFlash-Europe

Exempt Organizations

  • An executive order, signed by President Trump, provides that U.S. Treasury (the IRS) is not to take adverse actions against individuals, houses of worship, or other religious organizations on the basis that they have spoken about moral or political issues from a religious perspective.

 

Read TaxNewsFlash-Exempt Organizations

FATCA / IGA / CRS

  • Channel Islands: Financial institutions in Guernsey having FATCA and common reporting standard (CRS) reporting obligations must register with and report through the Information Gateway Online Reporter (IGOR) ahead of the reporting deadline of 30 June 2017.
  • Germany: A newsletter provides information to financial institutions about the official data set description, CRS user guide, and integration test.
  • Liechtenstein: The deadline for transmitting the CRS returns for the reporting year 2016 was extended from 30 June 2017 to 31 July 2017.
  • Luxembourg: The tax authority has made available to financial institutions the pre-validation and production platforms as of 24 April 2017.

 

Read TaxNewsFlash-FATCA / IGA / CRS

Trade & Customs

  • Two executive orders in the United States were signed by President Trump: (1) establishing the Office of Trade and Manufacturing Policy; and (2) addressing trade agreement violations and abuses.

 

Read TaxNewsFlash-Trade & Customs

United States

  • Rev. Proc. 2017-37 provides the inflation adjusted amounts for health savings accounts (HSAs) for calendar year 2018.
  • Notice 2017-30 provides 180-day emergency relief for taxable fuel removals from Milwaukee terminals due to the shutdown of the West Shore Pipeline.
  • Rev. Rul. 2017-09 provides guidance regarding the federal tax treatment of certain transactions referred to as “north-south” transactions. The ruling removes “north-south transactions” from the list of issues under study, meaning that the IRS is open to ruling on the integration of steps in such a transaction.
  • An IRS release announced that “eligible small business startups” can elect to apply part or all of their research credit against their payroll tax liability—instead of having to apply the research credit against their income tax liability.
  • The U.S. Court of Appeals for the Tenth Circuit held that lawsuits challenging “activities leading up to and culminating in” a U.S. federal tax assessment are barred by the Anti-Injunction Act, Code section 7421.
  • The U.S. Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund) released a notice of allocation availability for the 2017 round of the New Markets Tax Credit (NMTC) program totaling $3.5 billion.
  • A KPMG report examines how companies may be overpaying federal excise tax on purchases and long-term leases of heavy vehicles such as highway trucks, trailers, or tractors.
  • Montana House Bill 550, which is pending enactment, would increase the net operating loss (NOL) carryover period from seven years to 10 years, but limit the amount that may be carried back to $500,000 per year, for NOLs generated in a tax period beginning after 31 December 2017.
  • The New York Department of Taxation and Finance concluded that a taxpayer—in the process of developing a mobile phone application or "app" that would match users with bathrooms—would not have any sales tax consequences associated with an innovative business idea. 
  • The Pennsylvania Department of Revenue issued guidelines and FAQ documents that outline the steps and requirements for participation in a tax amnesty program. 
  • Tennessee House Bill 534 was signed into law by the governor, and decreases the state sales tax rate on the retail sale of food and food ingredients from 5% to 4% effective July 2017. Concerning franchise and excise taxes, House Bill 534 allows taxpayers whose primary business activity in Tennessee is manufacturing to elect to use a single-receipts apportionment formula.
  • The Virginia Supreme Court heard oral arguments in the Kohl case—a dispute addressing the deductibility of royalties paid by a retailer to a related party.

 

Read TaxNewsFlash-United States

 

  • The House of Representatives passed H.R. 1628, the American Health Care Act of 2017 (AHCA), which repeals and modifies a number of provisions of the Affordable Care Act, was previously reported by the Ways and Means Committee on a party-line vote on 9 March 2017.
  • Senate Finance Committee ranking member Ron Wyden (D-OR) released proposed legislation to modify the taxation of financial derivatives.

 

Read TaxNewsFlash-Legislative Updates

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