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KPMG’s Week in Tax: 9 - 13 July 2018

KPMG’s Week in Tax: 9 - 13 July 2018

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


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Transfer Pricing and BEPS

  • France: A decree clarifies and lists the requirements for transfer pricing documentation—including country-by-country (CbC) reports, Master files, and Local files—under French tax law.
  • Luxembourg: A bill would allow for ratification of the multilateral instrument (MLI) into Luxembourg domestic law.
  • Curaçao: Legislative measures have been approved for purposes of implementing parts of the base erosion and profit shifting (BEPS) recommendations or actions. Transfer pricing documentation requirements include CbC reports, Master files, and Local files beginning on or after 1 January 2018.
  • OECD: Following the release of a public discussion draft on transfer pricing for financial transactions, a KPMG report provides initial impressions.
  • Czech Republic: Tax authorities have heightened their focus on transfer pricing issues, turning their focus on corporations that generate losses or incur significant expenses for intra-group services.

Read TaxNewsFlash-Transfer Pricing and TaxNewsFlash-BEPS


  • South Africa: With the approval of six special economic zones (SEZs), companies operating in SEZs may be eligible for a corporate tax rate of 15%.

Read TaxNewsFlash-Africa


  • Canada: Proposed real estate rules in British Columbia would require entities that own land in British Columbia to disclose information about those individuals who ultimately own and control land.
  • Canada: The Ministry of Finance announced that a tax information exchange agreement with Grenada entered into force.
  • Canada: Second quarter financial statements may need to reflect 2018 Canadian income tax rate and other changes.
  • Chile: Tax developments include: (1) new instructions with respect to filing a reposición administrativa voluntaria (RAV) request; (2) guidance regarding the value added tax (VAT) that applies to real estate leasing transactions; and (3) guidance to clarify the use of a confirming inmobiliario (real estate confirming contract similar to a factoring arrangement).

Read TaxNewsFlash-Americas

Asia Pacific

  • Singapore: Changes to the stamp tax (duty) on residential real property include an increase to the rates of the “additional buyer’s stamp duty” and an increase in the rate of “additional conveyance duty for buyers” in an effort to “cool” the market.
  • Japan: The domestic procedures for ratifying the Trans-Pacific Partnership (TPP) trade agreement were completed.

Read TaxNewsFlash-Asia Pacific


  • Czech Republic: A draft of legislative changes to the value added tax (VAT) law for 2019 has been submitted to the Chamber of Deputies.
  • Czech Republic: Pending legislation would amend the definition of a “basic investment fund” that would be subject to income tax at a rate of 5%. 
  • Malta: Persons in possession of a permit to accept construction waste and demolition material in their quarries in Malta can claim a tax credit.

Read TaxNewsFlash-Europe


  • Luxembourg: Guidance was published concerning the list of “reportable jurisdictions” for common reporting standard (CRS) purposes. Hong Kong and Macau are included in the list; the Bahamas has been removed from the list.
  • Netherlands: The Dutch tax and customs administration issued guidance for financial institutions concerning FATCA and the CRS regimes.
  • Germany: A newsletter provides information about current developments with regards to the CRS regulations in Germany.
  • Mauritius: Reporting information on financial accounts to the Mauritius Revenue Authority for FATCA and CRS purposes must be submitted in XML format by 31 July 2018.

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • Final regulations address “inversions”—the generic term for a domestic corporation’s adoption of a foreign-parented corporate structure—and certain post-inversion restructuring transactions. The final regulations primarily adopt temporary regulations issued on April 4, 2016 (and scheduled to expire April 4, 2019) with several changes and clarifications. 
  • The IRS released a draft version of Schedule A, “Itemized Deductions” to be filed by those individual taxpayers who will elect to itemize deductions for tax year 2018 when they file Form 1040, “U.S. Individual Income Tax Return.”
  • States continue to issue statements or guidance or otherwise respond to the U.S. Supreme Court’s decision concerning the tax treatment of remote sellers in South Dakota v. Wayfair, Inc.
  • In New Jersey, tax legislation enacted in July 2018 includes changes to the “corporation business tax” laws.
  • The Georgia Department of Revenue issued guidance confirming that the statutory exclusion for dividends received from sources outside the United States, which applies to amounts otherwise included in income under IRC section 965, is allowed only for federal C corporations. The guidance also clarifies that tax on section 965 income may not be deferred under Georgia law.
  • The Minnesota Supreme Court held that the Tax Commissioner was not barred from requiring a banking group to use an alternative apportionment formula to include interest income and loans of some LLCs taxed as partnerships. The high court found the commissioner could exercise her “plain statutory authority” to rebut the presumption that the banking group’s method fairly reflected its taxable income. 
  • The Vermont budget bill was enacted, updating the state’s conformity to the Internal Revenue Code. Vermont adopted the federal income tax law as in effect on 31 December 2017, but without regard to federal income tax rates. The conformity update is effective retroactively on 1 January 2018 and applies to tax years beginning on or after 1 January 2017.
  • A KPMG report summarizes and adds context about three IRS rulings specifically addressing whether the right to receive payments out of new tax revenue collected by a municipality as the result of a real estate development was a qualifying real estate investment trust (REIT) asset and whether these payments were qualifying REIT income.

Read TaxNewsFlash-United States

Trade & Customs

  • The Office of the U.S. Trade Representative (USTR) identified Chinese imports that would be subject to additional tariffs of 10% under a retaliatory action.
  • The USTR announced a process for obtaining product exclusions from the additional tariff of 25% on certain products imported from China under the “Section 301” tariff provisions.

Read TaxNewsFlash-Trade & Customs

Exempt Organizations

  • A KPMG report examines the new excise tax on remuneration exceeding $1 million paid by tax-exempt organizations. 

Read TaxNewsFlash-Exempt Organizations

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