KPMG’s Week in Tax: 20 – 24 May 2019 - KPMG Luxembourg
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KPMG’s Week in Tax: 20 – 24 May 2019

KPMG’s Week in Tax: 20 – 24 May 2019

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

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Africa

  • South Africa: An amendment to the foreign earnings exemption that is to limit the exemption for the first ZAR 1 million of income for employment services rendered outside South Africa has an effective date of 1 March 2020.

Read TaxNewsFlash-Africa


Asia Pacific

  • Australia: Employee share scheme reporting is due 14 July 2019 for the tax year ending 30 June 2019.
  • Australia: The Australian Taxation Office (ATO) released the instructions for the “reportable tax position” schedule (form)..

Read TaxNewsFlash-Asia Pacific


Europe

  • OECD: The Organisation for Economic Cooperation and Development issued a report examining the effects of declining tax revenue from diesel and gasoline used in private cars and whether distance-based charges would help sustain tax revenues.
  • Switzerland: Swiss voters approved, by referendum, the tax reform measures that are now expected to be effective 1 January 2020.
  • Switzerland: A proposal to reduce the tax burden on employee participation in start-ups and family businesses has advanced following approval by committees of the Council of States and the National Council. The initiative would provide tax benefits in terms of: (1) the tax valuation of employee stocks for wealth tax purposes; (2) capital gains treatment on the sale of employee stocks; and (3) taxation of employee stock options.
  • Czech Republic: The Ministry of Finance is preparing a 2020 tax package with amendments to tax laws that would primarily affect insurance companies, excise taxes, and digital taxation.
  • EU: The Economic and Financial Affairs Council of the EU (ECOFIN) met to discuss the taxation of the digitalized economy, in anticipation of discussions that could take place at the next G20 summit in June. The ECOFIN also approved amendments to the EU “blacklist” of uncooperative jurisdictions for tax purposes—Bermuda, Aruba, and Barbados were removed from the blacklist.
  • Poland: The General Court of the European Union issued a judgment finding that the European Commission incorrectly classified the Polish tax on the retail sector as illegal state aid.

Read TaxNewsFlash-Europe


BEPS and Transfer Pricing

  • Poland: An amendment to a Polish law concerns the exchange of country-by-country (CbC) reports with the tax authorities of other countries.

Read TaxNewsFlash


FATCA / IGA / CRS

  • British Virgin Islands: The reporting deadline has been extended to 28 June 2019 for financial institutions that qualify as “trustee documented trusts” under the common reporting standard (CRS) regime.
  • Switzerland: An updated version of the CRS technical guidance provides detailed information on various data elements and the submission format for transmitting CRS returns.

Read TaxNewsFlash-FATCA / IGA / CRS


United States

  • Final regulations concern the requirements for a certification program for professional employer organizations—“certified professional employer organizations” or CPEOs. 
  • The U.S. Treasury Department’s Community Development Financial Institutions Fund announced the awarding of $3.5 billion in allocations of New Markets Tax Credit (NMTC). 
  • OMB’s Office of Information and Regulatory Affairs (OIRA) completed its review of proposed regulations from the U.S. Treasury Department relating to: (1) application of the domestic production activities deduction for specified agricultural or horticultural cooperatives; and (2) the exception from passive income under section 1297 for certain foreign insurance companies.
  • OIRA received for review proposed rules relating to the standards for distilled spirits and the malt beverage net content labeling regulation.
  • Notice 2019-39 concerns the issuance of tax-exempt state and local bonds under section 103 and tax-exempt Indian tribal government bonds under section 7871 in current refunding issues to refund original bonds issued in eligible targeted bond programs.
  • The U.S. Tax Court held that the IRS’s failure to meet the requirement under Code section 6672(b)(3)(B) for a final administrative determination in response to a timely protest blocks the IRS from proceeding to collect a trust-fund-recovery penalty.
  • Final regulations address the application of section 956 for corporate U.S. shareholders with respect to the new participation exemption system added by the 2017 tax law.
  • Rev. Proc. 2019-26 provides the annual depreciation limitations for passenger automobiles (including trucks and vans) first placed in service in calendar year 2019 or first leased in 2019.
  • Companies that receive “invitations” to participate in Delaware’s unclaimed property voluntary disclosure agreement (VDA) program have 60 days to respond or will be immediately eligible for selection for an unclaimed property audit.
  • Two comprehensive tax reform bills were enacted in Kentucky that made substantial changes to Kentucky’s tax law. One of the most significant changes was the repeal of Kentucky’s unique nexus consolidated return rules and adoption of mandatory unitary combined reporting.
  • Florida legislation that passed both houses of the legislature, if enacted, would adopt a subtraction for all amounts included in taxable income under IRC section 951A—that is, a global intangible low-taxed income or GILTI exclusion. This exclusion would be allowed only to the extent such amount is not deductible in determining federal taxable income.
  • Pending legislation in Hawaii would revise the economic nexus threshold, would adopt market-based sourcing rules for intangibles or services, and would disallow certain REITs a deduction for dividends paid.
  • The New Jersey Division of Taxation updated a technical bulletin addressing which entities are included and excluded from the New Jersey combined group and which entities are subject to the $2,000 minimum tax.
  • In Tennessee, new law changes the state’s excise tax laws to address the taxation of GILTI and section 965 income.
  • The Louisiana Department of Revenue and Virginia Department of Taxation issued guidance in response to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. (state sales tax implications of remote or online sales).
  • A KPMG report provides initial impressions and observations of proposed regulations under sections 954 concerning the definition of “related person” for foreign base company income (FBCI) purposes, and the active rent exception for foreign personal holding company income (FPHCI) purposes.

Read TaxNewsFlash-United States
 

  • The House passed a bill (H.R. 1994) that includes retirement savings provisions.
  • The Senate passed a bill that would amend the Code provisions enacted in 2017 and treat certain military survivor benefits received by a child as earned income for purposes of the so-called “kiddie tax” of Code section 1(g).

Read TaxNewsFlash-Legislative Updates


Trade & Customs

  • The U.S. Commerce Department, Bureau of Industry and Security (BIS), released a final rule revising the Commerce Control List (CCL) relating to dual-use goods and technologies.
  • U.S. Customs and Border Protection (CBP) issued information about the scope of exclusion from the Section 301 additional customs duties for imports from China and liquidation extension requests.
  • CBP issued a release concerning the decreased customs duty rate on imports of steel from Turkey.
  • The Office of the U.S. Trade Representative announced the United States reached an agreement with Canada and Mexico to remove the Section 232 tariffs for steel and aluminum imports from those countries and for the removal of all retaliatory tariffs imposed on U.S. goods by those countries.

Read TaxNewsFlash-Trade & Customs


Indirect Tax

  • OECD: A report examines the effects of declining tax revenue from diesel and gasoline used in private cars and whether distance-based charges would help sustain tax revenues.
  • Czech Republic: A 2020 tax package would include excise taxes and digital tax measures.
  • United States: Proposed rules relating to the standards for distilled spirits and the malt beverage net content labeling regulation are pending OIRA review.
  • United States: Guidance from the tax authorities of Louisiana and Virginia concern the tax treatment of remote sales as a response to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. (state sales tax implications of remote or online sales).

Read TaxNewsFlash-Indirect Tax

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