KPMG’s Week in Tax: 27 November - 1 December 2017 | KPMG | GLOBAL

KPMG’s Week in Tax: 27 November - 1 December 2017

KPMG’s Week in Tax: 27 November - 1 December 2017

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

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U.S. tax reform

  • The Senate started consideration of its version of tax reform legislation. In anticipation of Senate action on tax reform, KPMG prepared reports examining the effects of tax reform proposals for: (1) banking and capital markets; (2) income tax accounting; and (3) oil, gas, and mining provisions.

Read TaxNewsFlash-Tax Reform

BEPS and Transfer Pricing

  • OECD: Updated guidance was released on implementation of country-by-country (CbC) reporting under BEPS Action 13.
  • OECD: Mutual agreement procedure (MAP) statistics for 2016 were released.
  • Thailand: The Thai Revenue Department released its comments addressing certain issues and questions that were raised during a public consultation on a draft version of new transfer pricing rules.
  • Thailand: The Thai government agreed to implement certain minimum standards under Action 5 (harmful tax practices), following an OECD finding that certain incentives in Thailand were “preferential tax regimes.”

Read TaxNewsFlash-BEPS and TaxNewsFlash-Transfer Pricing

Europe

  • EU: Proposals to make the EU's value added tax (VAT) system more fraud-proof and to close loopholes that may lead to large-scale VAT fraud were released.
  • EU: A report summarizes recent developments about export controls and sanctions, and includes information about an EU arms embargo, targeted sanctions on Venezuela, and banned exports for North Korea.
  • Germany: A judgment from the Court of Justice of the European Union (CJEU) concerns the distinction between the supply of services and the supply of goods under leasing operations—a distinction that is important from a cash-flow perspective because with a supply of goods, fees under all leasing instalment arrangements are taxable as soon as the leased asset is handed over.
  • Italy: The draft budget law 2018 includes a measure that there is no liability for “registration tax” on certain business reorganizations (for example, legal demergers of a business, followed by a disposal of shares). 
  • Italy: The draft budget law 2018, expected to be approved by the end of 2017, includes a proposal to postpone the effective date of VAT rate increases.

Read TaxNewsFlash-Europe

Africa

  • Zambia: Tax provisions in the 2018 budget include the introduction of a property transfer tax and an increase in the presumptive tax rate for public service vehicle operators.

Read TaxNewsFlash-Africa

Americas

  • Canada: Taxpayers have until 31 December 2017 to make “fairness” relief requests related to 2007—including requests relating to penalty relief, late elections, and claims for refunds.
  • Canada: A bill in New Brunswick—that would decrease the province’s small business income tax rate to 2.5% effective 1 April 2018—received first reading.
  • Canada: A tax bill in Quebec—that would extend an existing measure that permits certain non-arm’s length share transfers without triggering the Quebec anti-surplus stripping rules—received first reading.

Read TaxNewsFlash-Americas

Asia Pacific

  • Singapore: “Customer accounting” guidance for goods and services tax (GST) provides that beginning 1 January 2019, responsibility for output tax on a supply shifts from the supplier to the customer.
  • Thailand: The Thai Revenue Department addressed concerns and questions raised about proposed legislative amendments that would affect the tax treatment of goods and services provided via foreign e-commerce into the Thai market.
  • India: A tribunal held that the taxpayer was responsible for the tax on interest accumulated in a provident fund account after the employment ends. 
  • India: A tribunal held that income earned by a non-resident for services rendered outside India cannot be taxed in India merely because the receipt of salary is in India. 
  • India: A tribunal held that there is no capital gains addition under section 93 of the Income-tax Act, 1961 on the sale of an Indian company’s shares by a Mauritian subsidiary to another Indian company. 
  • India: A high court held that the tax department cannot file an appeal or seek to argue the case on merits, when this would be contrary to the requirements of Central Board of Direct Taxes circulars prescribing monetary limits for the filing of departmental appeals. 

Read TaxNewsFlash-Asia Pacific

FATCA / IGA / CRS

  • Netherlands: An updated version of a reporting application form was released with respect to the bank and investment products application.
  • United States: Proposed regulations on the centralized partnership audit regime include measures relating to tax withholding on foreign persons and tax withholding to enforce reporting on certain foreign accounts—specifically, provisions related to chapters 3 and 4 of subtitle A of the Code (in general, withholding tax and reporting rules).
  • Singapore: An updated version of common reporting standard (CRS) “frequently asked questions” (FAQs) provides clarification to financial institutions on matters relating to CRS registration requirements.
  • Taiwan: Regulations on implementation of the CRS regime were issued, and include guidance on reporting rules and due diligence procedures by Taiwanese financial institutions for the automatic exchange of financial account information under the CRS.
  • Ireland: An updated version of FATCA guidance focuses on the file validation process.
  • Switzerland: An updated version of the CRS technical guidance contains a new section on data integrity—providing guidance to Swiss financial institutions about account reports that were lost or modified during the transmission.

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • Notice 2017-71, released by the IRS, addresses the effect of the changed due date for filing partnership returns on certain acts performed for the 2016 tax year of a partnership, real estate mortgage investment conduit (REMIC), or certain other affected entities. The notice provides expanded relief to entities falling within the parameters of Notice 2017-71—acts including but are not limited to making elections, paying tax, or contributing to an employee pension plan, acts normally required to be taken on a timely filed return.
  • Proposed regulations address the interplay between certain international tax rules and the U.S. centralized partnership audit regime.
  • There are no changes to the tier 2 tax rates for 2018 (taxes imposed on railroad employees, employers, and employee representatives and that serve as a source of funding for benefits under the Railroad Retirement Act).
  • A “reviewed opinion” of the U.S. Tax Court addressed the timely mailing and timely filing rule for the Tax Court petition, when there was no U.S. Postal Service postmark on the envelope.
  • The Puerto Rico Treasury Department published more guidance providing relief from approaching tax deadlines and pension plan distributions, for taxpayers affected by Hurricane Maria.

Read TaxNewsFlash-United States

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