KPMG’s Week in Tax: 20 - 24 November 2017 | KPMG | GLOBAL

KPMG’s Week in Tax: 20 - 24 November 2017

KPMG’s Week in Tax: 20 - 24 November 2017

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

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U.S. tax reform

  • The Senate Finance Committee—after approving the tax reform bill—released legislative text of the bill. It will now be considered by the full Senate.
  • KPMG reports examine provisions in the tax reform bills (House and Senate Finance Committee versions) that would affect private equity funds, and insurance-related provisions from the version of the tax reform bill approved by the Senate Finance Committee.

Read TaxNewsFlash-Tax Reform

UK

  • The Autumn budget, presented 22 November 2017, includes tax proposals.

Read KPMG’s initial analysis

Transfer Pricing and BEPS

  • Australia: The Australia Taxation Office (ATO) announced it has extended the due date for filing country-by-country (CbC) statements until 15 February 2018.
  • Taiwan: Changes to the transfer pricing documentation rules reflect recommendations of the OECD under the base erosion and profit shifting (BEPS) Action 13—that is, country-by-country (CbC) reporting and Master file documentation. The transfer pricing documentation amendments will apply to fiscal years of 2017 and later.
  • Romania: Guidance concerns the form to be used for filing CbC reports that will be the annual declaration of information concerning the multinational enterprise group of which the taxpayer is a member.
  • United States: The IRS’s updated jurisdiction status table includes recently signed competent authority arrangements (CAAs) for the exchange of CbC reports. The IRS also released “practice units” that define common ownership or control for purposes of Code section 482.
  • Peru: Amendments to Peru’s tax regulations update the documentation requirements for transfer pricing purposes, and include CbC reporting, Master file, and Local file obligations.

Read TaxNewsFlash-Transfer Pricing

Europe

  • Finland: The Court of Justice of the European Union issued a judgment, concluding that Finnish law providing for immediate taxation of unrealized capital gains on the transfer of a permanent establishment was contrary to the freedom of establishment because the law did not allow for the deferral of taxation of the unrealized capital gains upon the transfer of a permanent establishment to another EU Member State.
  • Italy: The draft budget law 2018 proposes an increase in taxes applicable to gains realized on the disposal of “qualifying shares” of Italian companies. The change proposes to replace the current tax treatment with a “flat” 26% substitute tax—that would be effective 1 January 2019, if approved.
  • Italy: Guidance clarifies that carried interest will be treated as capital income, and not employment income, if certain requirements are satisfied.
  • Romania: The government has adopted an ordinance—effective 1 January 2018—that amends the tax rules that concern an exit tax when assets or businesses are transferred out of Romania to avoid taxation.
  • Hungary: A package of tax legislation has been approved by the Hungarian parliament, and there are measures concerning tax procedural rules as well as certain provisions that will affect corporate and individual taxpayers.
  • Serbia: Application of the new “rulebook” for value added tax (VAT) records and calculations is postponed until 1 July 2018 (originally scheduled to be effective 1 January 2018).
  • Austria: The Administrative Supreme Court issued a decision that addresses the ability to use loss carryforwards when there is a change of indirect shareholder(s). The court held that loss trafficking rules do not apply if the indirect shareholder structure did not change even though the direct shareholder changed.
  • France: The Court of Justice of the European Union issued opinions in two cases concerning the French mechanism for deferred taxation of capital gains.

Read TaxNewsFlash-Europe

Africa

  • Nigeria: Guidance was issued for pension fund administrators and pension fund custodians about withdrawals from voluntary contributions to pension plans.

Read TaxNewsFlash-Africa

Americas

  • Costa Rica: The filing deadline for Form D-140 concerning the corporate “flat tax” has been temporarily suspended. The filing requirements are delayed until February 2018.

Read TaxNewsFlash-Americas

FATCA / IGA / CRS

  • France: The draft “corrective” finance bill 2017 includes proposals relating to the automatic exchange of financial account information under the FATCA and common reporting standard (CRS) regimes. 

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • A Treasury Department and IRS release extends certain time frames for participants and beneficiaries covered by group health plans, disability and other welfare plans, and pension plans when they were directly affected by Hurricane Maria.
  • A recently released private letter ruling addressed the U.S. federal tax consequences of a reorganization of a U.S. company’s life and health insurance business. The IRS specifically ruled on issues related to whether the transfer of the company’s Country A business from a Country A branch of a U.S. company to a newly formed Country A corporation—which then made an election under section 953(d)—was a reorganization under section 368(a)(1)(F) (an F reorganization).
  • In Connecticut, newly enacted legislation extends the deduction against income to offset the financial statement impact (the “FAS 109 deduction”) to 30 years, effective for the income year of the combined group that begins in 2018. A second bill, if signed by the governor, would make the effective date 2021 (instead of 2018).
  • After Pennsylvania’s high court held that a $3 million net loss deduction limitation, as in effect for the 2007 tax year, violated the Uniformity Clause of the Pennsylvania Constitution, the Department of Revenue issued prospective guidance.
  • The Tennessee Department of Revenue ruled that an annual subscription fee for access to a cloud-based scheduling interface was subject to sales tax.
  • The Vermont Department of Taxes released a draft technical bulletin summarizing when taxpayers are considered to have established Vermont corporate income tax nexus, and clarifying that physical presence is not required to create nexus.

Read TaxNewsFlash-United States

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