KPMG’s Week in Tax: 11 - 15 December 2017 - KPMG Luxembourg
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KPMG’s Week in Tax: 11 - 15 December 2017

KPMG’s Week in Tax: 11 - 15 December 2017

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


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U.S. Tax Reform

  • Conferees from the U.S. House of Representatives and Senate for H.R. 1, the “Tax Cuts and Jobs Act,” formally met for the first time, to consider how to address the differences between the version of the tax reform bill passed by the House and the version passed by the Senate. The chairman of the conference committee stated that an agreement had been reached, but no paper or explanations were released. 
  • The Joint Committee on Taxation (JCT) released a macroeconomic analysis of the “Tax Cuts and Jobs Act,” as passed by the U.S. House of Representatives.
  • The JCT released a comparison of the revenue provisions contained in H.R. 1, the “Tax Cuts and Jobs Act,” as passed by the House, and as amended and passed by the Senate.
  • Finance ministers from five EU countries wrote to the U.S. Treasury Secretary and members of the U.S. Congress, expressing their concerns regarding certain aspects of the U.S. tax reform efforts.

Read TaxNewsFlash-Tax Reform

Transfer Pricing and BEPS

  • Czech Republic: Beginning 1 January 2018, taxpayers may ask the tax administrators for binding rulings on the manner of determining the tax base of a permanent establishment (or a registered branch of a foreign entity) located in the Czech Republic.
  • Czech Republic: A review of the country-by-country (CbC) notifications indicating which entity would be filing CbC reports revealed certain common errors during the first phase of the CbC reporting process.
  • Canada: The deadline for filing certain CbC reports generally is 31 December 2017 for multinational enterprise (MNE) groups with a 31 December 2016 fiscal year-end.
  • New Zealand: A bill concerning base erosion and profit shifting (BEPS) has been introduced, and includes provisions that would reduce interest rates allowed on inbound related-party loans, narrow thin capitalisation “safe harbour” protection, and revise the transfer pricing rules to expand the authority of the Inland Revenue.
  • Italy: The filing deadline for the first year for CbC reporting has been postponed to 9 February 2018 for multinational enterprise groups with a tax year that started on or after 1 January 2016 and ended before 31 December 2016.
  • Greece: Guidelines for implementing the requirements for CbC reports include the submission procedures for the CbC report and for filing a notification as to which entity will be filing the CbC report (the CbC notification).

Read TaxNewsFlash-Transfer Pricing and TaxNewsFlash-BEPS


  • France: Temporary “exceptional surcharges” for large corporate taxpayers have been finally adopted. The French Constitutional Court concluded that the “exceptional surcharges”—to be imposed on the largest companies—are constitutional, thus finalizing implementation of the tax levy.
  • Bulgaria: Changes to the value added tax (VAT) law are generally effective 1 January 2018.
  • Czech Republic: The tax authorities are considering guidance about the rules in for applying an exemption from VAT for transport services rendered in connection with certain exports and imports of goods.
  • EU: Officials with the EU and Japan announced the successful conclusion of negotiations regarding an economic partnership agreement—one of the largest bilateral trade agreement negotiated by the EU.
  • Luxembourg: Two new draft laws would implement two distinct registries (registers) of “ultimate beneficial owners”—(1) a central registry for the ultimate beneficial owners of legal entities; and (2) a central registry for trusts and fiduciaries.
  • Netherlands: The European Court of Human Rights (ECHR) issued a judgment upholding the Dutch “crisis levy” as imposed on salaries exceeding a threshold amount in 2013 and 2014. 
  • Netherlands: The Dutch Supreme Court issued a decision in a case concerning the “30% ruling” and the introduction of the 150-kilometer criterion for employees seconded or assigned to work in the Netherlands.
  • Netherlands: A final VAT return for 2017 may require a correction in light of the VAT “deduction exclusion decree” and the effects concerning promotional gifts and company cars.
  • EU: The European Commission announced new guidelines on withholding taxes to help EU Member States reduce costs and simplify procedures for cross-border investors in the EU.

Read TaxNewsFlash-Europe


  • South Africa: An advisory panel has recommended the creation of a board to supervise the operations of the South African Revenue Service and that a tax specialist be appointed to investigate complex group transactions in order to enhance tax collections.

Read TaxNewsFlash-Africa


  • Canada: The 2017 Quebec budget bill—that includes corporate and individual (personal) tax measures—received Royal Assent.

Read TaxNewsFlash-Americas

Asia Pacific

  • India: A tribunal held that because the taxpayer was liable to tax in the United Arab Emirates (UAE) by virtue of its incorporation in the UAE, it was eligible for the benefits under the India-UAE income tax treaty. 
  • India: The Supreme Court held that a circular issued by the Central Board of Direct Taxes specifying the monetary limit for filing an appeal before the Appellate Tribunal, High Courts, and Supreme Court applies even to pending matters, subject to certain conditions.
  • India: A tribunal held that a payment made by the taxpayer to a non-resident company for software was covered under the term “scientific equipment,” and therefore was taxable as royalty income under the Income-tax Act, 1961 as well as the India-Germany income tax treaty. 
  • India: Authorities in India have expressed certain reservations about the updated OECD model tax convention. 
  • India: The Supreme Court held that an advance deposit of central excise tax (duty) in a personal ledger account is an actual payment within the meaning of section 43B of the Income-tax Act, 1961. Therefore, the taxpayer was entitled to a deduction of this amount. 

Read TaxNewsFlash-Asia Pacific


  • Finland: Updated guidance was issued on technical description and specifications required for transmission of the common reporting standard (CRS) returns, and implementation of the FATCA agreement.
  • OECD: A consultation document seeks comments on model mandatory disclosure rules inspired by the approach taken for CRS “avoidance arrangements” outlined within Action 12 of the BEPS project.
  • United States: The IRS published new “frequently asked questions” (FAQs) for qualifying intermediaries / withholding foreign partnerships / withholding foreign trusts (QI/WP/WT).

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • Rev. Proc. 2018-08 and Rev. Proc. 2018-09 provide safe harbor methods for individual taxpayers to use in determining the amount of casualty losses, and in particular losses incurred as a result of hurricanes in 2017.
  • An IRS “practice unit” was released as guidance concerning the process for calculating the section 956 inclusion.
  • A KPMG report considers IFRS accounting for certain taxes and other levies in the United States.
  • A Colorado appeals court held that a domestic holding company, with no property and payroll in the state, could not be “forcibly” included in a Colorado combined report with its affiliates.
  • The Colorado Department of Revenue issued private letter ruling concluding that an employee’s presence in the state created nexus for an online retailer, even though the employee conducted non-sales related activities.
  • Indiana’s tax court rejected the Department of Revenue’s position that revenue that an out-of-state service provider (an online university) received from Indiana in-state students was attributable to Indiana and was to be sourced to the state.
  • New Jersey’s tax court concluded that a company headquartered and incorporated in India, with a branch located in the United States, was not required to add back worldwide income in computing its New Jersey corporation business tax (CBT); in other words, the foreign taxpayer was not required to pay New Jersey CBT on its worldwide income.

Read TaxNewsFlash-United States

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