KPMG’s Week in Tax: 8 - 12 August 2016
KPMG’s Week in Tax: 8 - 12 August 2016
Tax developments or tax-related items reported this week include the following.
BEPS and Transfer Pricing
- Nigeria: Approval of a Multilateral Competent Authority Agreement (MCAA) for the exchange of country-by-country (CbC) reports is advancing, with approval by a government council and legislation expected to be introduced soon.
- Canada: Canadian companies of certain multinational corporate groups need to consider how to prepare to meet new CbC reporting requirements now that Finance Canada has released draft legislation to implement CbC reporting rules.
- Asia Pacific: Two-thirds of the countries included in a survey of the Asia Pacific region have already introduced, are in the process of introducing, or have stated an intention to introduce CbC reporting, Master file, and Local file requirements.
- EU: KPMG’s member firms in Europe along with KPMG’s EU Tax Centre have prepared a report providing step-by-step comparative guidance to the EU CbC reporting initiatives.
- Australia: The Australian Taxation Office is offering administrative concessions in relation to administrative penalties and interest on historical positions to certain taxpayers that: (1) proactively assess and voluntarily disclose tax risks associated with offshore hubs; and (2) are prepared to restructure their arrangements.
- Germany: A German court referred a question to the Court of Justice of the European Union (CJEU) concerning application of the German transfer pricing rules with regards to loan guarantees made without any consideration having been paid for the guarantee or letter of comfort.
- Canada: Canadian multinationals need to repay "grandfathered" upstream loans by 19 August 2016 to avoid triggering income inclusion.
- Australia: The ATO provided notice that it will commence consultation with external stakeholders on the administrative arrangements for the provision of “general purpose” financial statements.
- Cambodia: Businesses and entities registered with the Ministry of Commerce are required to re-register via an online (electronic) system. The deadline for re-registration has been extended to 30 September 2016.
- Cambodia: Beginning in August 2016, Cambodia’s tax department and municipal officials in Phnom Penh will begin collecting certain data including value added tax (VAT) data, tax payment receipts, and utility invoices.
- New Zealand: A tax bill for 2016 introduced business tax proposals including provisional tax and transparency measures.
- Pakistan: An “amendment ordinance” revises the tax treatment on dispositions of immovable property. The Federal Board of Revenue now has the authority to determine the fair market value of immovable property.
- Thailand: The government issued a statement describing its desire to extend for at least one more year the reduced rate (7%, instead of the statutory rate of 10%) of VAT.
- India: The Union Cabinet approved changes in the GST Constitution Amendment Bill that would provide a goods and services tax (GST) regime.
- Malta: The Malta Financial Services Authority announced the launch of a new framework applicable for notification of alternative investment funds.
- Ireland: The research and development (R&D) tax credit is open to companies in Ireland that undertake qualifying research and development activities in Ireland or within the EEA.
- Poland: The Ministry of Finance released additional answers to a list of “frequently asked questions” (FAQs) concerning the “standard audit file” procedures for VAT purposes.
FATCA / IGA / CRS
- Canada: Canadian financial institutions soon must collect information on financial accounts held by tax residents of jurisdictions outside of Canada and the United States and then provide these collected details to the Canada Revenue Agency (CRA).
- New Zealand: The Inland Revenue Department published a Regulatory Impact Statement for the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill providing an analysis of AEOI implementation options.
- New Zealand: A second omnibus tax bill for 2016 was introduced, containing provisions for: (1) a new accounting income method; (2) requirements under the OECD’s automatic exchange of information (AEOI) initiative; and (3) enhanced disclosure requirements for New Zealand foreign trusts.
- United States: The IRS announced that in response to requests to expand technical solutions for International Data Exchange Services (IDES) data preparation, the IRS has developed a Unix version.
- Canada: Finance’s draft legislative proposals would implement certain measures that were originally announced in the 2016 federal budget including items concerning the common reporting standard (CRS).
- Cayman Islands: The tax authority announced an extension to the “soft enforcement due dates” for notification and reporting under the U.S. FATCA regime and under the United Kingdom regime for Crown Dependencies and Overseas Territories (CDOT). The revised deadline is 2 September 2016.
- The U.S. Tax Court issued a long-awaited opinion concluding that a property exchange qualified for section 1031 like-kind exchange treatment when title was held by an exchange facilitator.
- Notice 2016-49 provides certain relief measures concerning the requirements for a certification program for professional employer organizations—“certified professional employer organizations” or CPEOs (also referred to as employee leasing companies).
- The North Carolina corporate income tax rate will be reduced from 4.0% to 3.0% beginning January 1, 2017.
- The South Carolina Department of Revenue finalized guidance to be used in determining nexus for corporate income tax purposes, with the guidance providing 12 categories of activities—including activities of unrelated parties, financial activities and transactions, and computer and internet-based activities.
- The Wisconsin Department of Revenue concluded that fees charged by a restaurant for tablets—electronic devices—used by customers to order food and to access “premium content” (e.g., games, news, sports, social media) were subject to sales and use tax. Further, commissions paid by the restaurant to the tablets’ vendor, based on the amount of premium content sold to restaurant customers, were subject to sales and use tax. Also, because the restaurant used the devices in its business, it could not provide the vendor with a resale certificate.
- A message issued by the Bureau of Industry and Security (BIS) of the U.S. Commerce Department reports on the deployment by BIS and U.S. Customs and Border Protection (CBP) of a new automated export system (AES) function to assist filers reporting BIS-licensed exports.
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