KPMG’s Week in Tax: 7 - 11 January 2019 - KPMG Luxembourg
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KPMG’s Week in Tax: 7 - 11 January 2019

KPMG’s Week in Tax: 7 - 11 January 2019

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

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Transfer Pricing

  • EU: The European Commission reported it has opened an in-depth investigation to examine whether tax rulings granted by the Netherlands to a multinational corporation provide “an unfair advantage over its competitors” in breach of EU state aid rules.
  • Argentina: A decree published in late 2018 includes provisions that implement certain transfer pricing measures such as rules for Master file requirements, transfer pricing methodology, and arm’s length requirements. 
  • Poland: Decrees generally implement the amended transfer pricing rules for transactions conducted in 2019 (taxpayers may elect to apply the measures for controlled transactions conducted during 2018).
  • Lithuania: New transfer pricing documentation requirements—that generally reflect measures implementing recommendations under the OECD’s base erosion and profit shifting (BEPS) project—apply to related-party transactions conducted in 2019 and subsequent years. 


Read TaxNewsFlash-Transfer Pricing

FATCA / IGA / CRS

  • Channel Islands: The income tax authority of Guernsey issued an “information gateway reporter” user guide to assist users with common reporting standard (CRS), FATCA, and certain other reporting requirements.
  • Liechtenstein: Amendments to the CRS regulations include: (1) additions and changes to the list of reportable jurisdictions; and (2) classification of non-profit legal entities.
  • Switzerland: Guidance concerns an amendment to the CRS ordinance that was effective 1 January 2019.
  • Japan: An updated version of “frequently asked questions” (FAQs) was issued as guidance for Japanese financial institutions concerning the technical description and specification for filing reports under the CRS.


Read TaxNewsFlash-FATCA / IGA / CRS

Trade & Customs

  • Serbia: Customs legislation, effective in June 2019, generally implements and harmonizes Serbian customs rules with the EU’s customs measures.
  • Japan: The EU-Japan Economic Partnership Agreement will enter into force 1 February 2019, following completion of the agreement’s ratification by the EU Parliament and Japan’s National Diet.
  • Canada: A report summarizes customs changes in 2018.


Read TaxNewsFlash-Trade & Customs

Americas

  • Canada: A summary of goods and services tax (GST), indirect tax, and customs changes in 2018 that may have implications for corporations.
  • Canada: The deadline for “investment limited partnerships” to make an election for goods and services tax / harmonized sales tax (GST/HST) pursuant to the rules that also apply for selected listed financial institutions (SLFIs) is 11 February 2019.


Read TaxNewsFlash-Americas

Europe

  • Netherlands: New value added tax (VAT) rules apply to vouchers, stamps, and tokens, effective 1 January 2019, and guidance on implementation is provided for Dutch entities.
  • Netherlands: UK citizens and their family members who lawfully reside in the Netherlands before “Brexit” will retain their right of residence in the event of a Brexit “no deal.” The transitional rules will apply for a period of 15 months and continue through 1 July 2020.
  • Serbia: Customs legislation, effective in June 2019, generally implements and harmonizes Serbian customs rules with the EU’s customs measures.
  • EU: The European Commission has requested that Italy and Spain align their taxation of ports with state aid rules.


Read TaxNewsFlash-Europe

United States

  • The Office of Management and Budget (OMB) reportedly has determined that refundable alternative minimum tax (AMT) credit carryforwards are not subject to sequestration. The determination has not been posted by the IRS because of the partial government shutdown.
  • The excise tax rates imposed under section 4121 on a producer’s sale of coal mined from coal mines in the United States are reduced effective 1 January 2019. The funds generated under section 4121 are dedicated to the “Black Lung Disability Trust Fund.”
  • The IRS confirmed that it will process individual income tax returns beginning 28 January 2019, and that it intends to provide refunds to taxpayers as scheduled.
  • The IRS announced the cancellation of a public hearing on proposed regulations relating to the opportunity zone measures under section 1400Z-2 concerning capital gains invested in qualified opportunity funds. The hearing date was affected by the partial government shutdown. A new public hearing date on these proposed regulations will be announced once appropriations for the Treasury Department are restored.
  • The IRS posted final versions of certain forms and instructions for purposes of implementing certain provisions enacted by the U.S. tax law (Pub. L. No. 115-97) in December 2017.
  • New law in Puerto Rico in December 2018 introduces changes to the taxation of corporations, partnerships, and individuals as well as provides new definitions and guidance for information returns. Most changes apply to tax years beginning after 31 December 2018.
  • The New Jersey Division of Taxation released a new form (CBT-DIV 2017 Supplemental) that is intended to simplify the reporting of dividends and deemed mandatory repatriation dividends in light of IRC section 965. The due date for filing Form CBT-DIV 2017 Supplemental is on or before 31 January 2019, or within 30 days of an extension, whichever is later.
  • More states—Georgia, Iowa, Nebraska, Utah, West Virginia, and Wisconsin, and the District of Columbia—responded to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. (state sales tax implications of remote or online sales).
  • Iowa’s high court held that a home improvement retailer was required to collect sales tax on installation services performed by subcontractors in connection with customers’ purchases of windows, doors, sinks, faucets, and various other items. 
  • A Louisiana appellate court affirmed a trial court’s decision requiring an online retailer to collect local (parish) sales tax on goods sold by third-party retailers using the retailer’s online marketplace.
  • Missouri’s high court agreed with the Department of Revenue that a sales and use tax refund claim was not timely filed. The “date of overpayment” was determined to be the date when the taxpayer remitted the sales tax to the Department, and in this case, that was more than three years from the date when the refund claim was filed (and not as the taxpayer asserted, measured from the date when the tax was actually due).


Read TaxNewsFlash-United States

Cooperatives

  • The IRS posted Form 1120-C, U.S. Income Tax Return for Cooperative Associations, for the tax year 2018.


Read TaxNewsFlash-Cooperatives

Indirect Tax

  • Netherlands: New VAT rules apply to vouchers, stamps, and tokens, effective 1 January 2019.
  • United States: The excise tax rates imposed under section 4121 on a producer’s sale of coal mined from coal mines in the United States are reduced effective 1 January 2019. 
  • Canada: A summary of goods and services tax (GST), indirect tax, and customs changes in 2018 that may have implications for corporations is provided.
  • Canada: The deadline for “investment limited partnerships” to make an election for GST/HST pursuant to the rules that also apply for SLFIs is 11 February 2019.
  • United States: More states and local governments responded to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. (state sales tax implications of remote or online sales).
  • United States: Iowa’s high court held that a home improvement retailer was required to collect sales tax on installation services performed by subcontractors in connection with customers’ purchases of windows, doors, sinks, faucets, and various other items. 
  • United States: A Louisiana appellate court affirmed a trial court’s decision requiring an online retailer to collect local (parish) sales tax on goods sold by third-party retailers using the retailer’s online marketplace.
  • United States: Missouri’s high court agreed with the Department of Revenue that a sales and use tax refund claim was not timely filed. The “date of overpayment” was determined to be the date when the taxpayer remitted the sales tax to the Department, and in this case, that was more than three years from the date when the refund claim was filed (and not as the taxpayer asserted, measured from the date when the tax was actually due).

 

Read TaxNewsFlash-Indirect Tax

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