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KPMG’s Week in Tax: 12 - 16 August 2019

KPMG’s Week in Tax: 12 - 16 August 2019

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

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Transfer Pricing and BEPS

  • Australia: An Australian Tax Office (ATO) official—in remarks about the ATO’s ongoing focus on transfer pricing due to its importance to the Australian taxation system—outlined key transfer pricing issues and provided insights on what could attract the ATO’s attention.
  • OECD: The Organisation for Economic Cooperation and Development (OECD) announced the first round of “stage 2” peer-review monitoring reports double-taxation dispute resolution mechanisms and developments in Belgium, Canada, Netherlands, Switzerland, United Kingdom, and United States.
  • Bulgaria: Rules requiring transfer pricing documentation were approved by the national assembly. The first year for which the mandatory transfer pricing documentation—consisting of a Master file and a Local file—will be required is 2020.

Read TaxNewsFlash

FATCA / IGA / CRS

  • Taiwan: An updated version of “frequently asked questions” (FAQs) was issued as guidance relating to the common reporting standard (CRS) implementation and due diligence procedures.
  • United States: The IRS released a draft version of Form 8966, “FATCA Report” for 2019.
  • Brazil: The tax authority (RFB) updated regulations with respect to the CRS regime. The effective date of the new regulations is 7 August 2019.

Read TaxNewsFlash-FATCA / IGA / CRS

Africa

  • Zimbabwe: Tax measures in the 2019 mid-term fiscal policy review statement include certain tax proposals including changes to certain tax rates and threshold amounts.
  • Nigeria: A notice from the tax authority concerns the withholding tax and value added tax (VAT) treatment of commissions, rebates, and other payments made by companies with regard to distributors, dealers, and agents. 

Read TaxNewsFlash-Africa

Americas

  • Costa Rica: A resolution concerns the requirement that certain taxpayers must use a specific portal for filing tax returns.
  • Canada: There are new tax disclosure requirements in Quebec for those who have entered into a nominee agreement, and a requirement to disclose certain agreements by 16 September 2019. 
  • Canada: A KPMG report examines certain Canadian tax fundamentals with regard to the real estate sector, and includes discussions of income tax and indirect tax (GST/HST) issues affecting the Canadian real estate industry.

Read TaxNewsFlash-Americas

Asia Pacific

  • China: Guidance from China’s immigration agency—effective 1 August 2019—includes provisions aimed at attracting and retaining “foreign talent.”

Read TaxNewsFlash-Asia Pacific

Europe

  • Czech Republic: A bill to transpose into Czech law an EU Directive on tax dispute resolution mechanisms in the EU has been submitted to the Chamber of Deputies.
  • Czech Republic: The tax authority issued guidance clarifying the application of VAT on various types of vouchers, and distinguishes between (1) vouchers subject to new VAT regulations and (2) discount vouchers.
  • Luxembourg: Text of a bill to transpose an EU Directive on administrative cooperation in the field of taxation (DAC 6)—also known as the EU Directive implementing mandatory disclosure rules for intermediaries—was released. There are certain differences between Luxembourg’s bill and the EU Directive.
  • Poland: A draft law would introduce a new mechanism for cooperation between taxpayers and the national tax administration. The cooperation agreement program is expected to be effective 1 July 2020.
  • Germany: A KPMG report examines a decision of the German Federal Tax Court (BFH) holding that an application for retroactive consideration of a transfer (contribution) for tax purposes is not time-limited, but that such an application cannot be changed retroactively.

Read TaxNewsFlash-Europe

United States

  • The IRS announced it will automatically waive the estimated tax penalty for eligible individual taxpayers who had already filed their 2018 federal income tax returns, but did not claim a penalty waiver.
  • OMB’s Office of Information and Regulatory Affairs (OIRA) received for review from the U.S. Treasury Department proposed regulations that would update the life expectancy tables that apply for purposes of computing minimum required distributions from qualified retirement plans under section 401(a)(9).
  • Rev. Rul. 2019-19 concludes that an individual’s failure to cash a distribution check from a qualified retirement plan does not allow the individual to exclude the amount from gross income and also does not affect the withholding obligations of the plan administrator.
  • A KPMG report provides initial impressions on proposed regulations that modify and expand the scope of the rules in Reg. section 1.861-18 for classifying transactions involving computer programs, and that address the classification of cloud transactions.
  • The Texas Comptroller—in response to the decision of the U.S. Supreme Court in South Dakota v. Wayfair, Inc.—issued draft proposed amendments that would apply the Wayfair nexus holding to the Texas franchise tax.
  • The California Office of Tax Appeals sustained an assessment for individual income tax against a nonresident individual who performed screenplay writing services for two movie producers—both California LLCs—during the 2015 tax year. The taxpayer, an Arizona resident, was self-employed as a screenwriter and received Forms 1099-MISC from the California LLCs in 2015 but did not file a 2015 California return.
  • The Illinois Department of Revenue announced an upcoming tax amnesty program for unresolved liabilities for the tax periods 15 March 2008 through 30 June 2019. The tax amnesty program will begin 1 October 2019 and end 15 November 2019.
  • The Indiana Department of Revenue determined that a financial institution had to include lawsuit settlement proceeds in both the numerator and denominator of its sales factor for the state’s financial institution tax.
  • The Tennessee Department of Revenue issued guidance on computing the IRC section 163(j) limitation for Tennessee corporate excise tax purposes.

Read TaxNewsFlash-United States
 

  • The U.S. Senate Finance Committee released reports from three of several bipartisan taskforces formed to examine 42 temporary tax provisions that expired, or will expire, between 31 December 2017 and 31 December 2019. The taskforce summaries include input received from various stakeholders and are from the energy taskforce; the cost recovery taskforce; and the individual, excise, and other expiring policies taskforce.

Read TaxNewsFlash-Legislative Updates

Exempt Organizations

  • The IRS posted a draft version of Form 8283, “Noncash Charitable Contributions,” that contains changes to the current version of the form—changes that reflect final regulations released last year on the substantiation and reporting requirements for charitable contributions of certain types of property and eliminate lingering uncertainty as to the applicable requirements.

Read TaxNewsFlash-Exempt Organizations

Trade & Customs

  • The U.S. Commerce Department announced an affirmative final determination in the antidumping duty (AD) investigation of imports of refillable stainless steel kegs from Mexico.
  • The U.S. Commerce Department announced the self-initiation of new inquiries into possible circumvention of antidumping duty (AD) and countervailing duty (CVD) orders with respect to certain corrosion-resistant steel products (CORE) made with substrate from China or Taiwan, completed in Costa Rica, Guatemala, Malaysia, South Africa, and the United Arab Emirates (UAE), and then exported to the United States.
  • The Office of the U.S. Trade Representative (USTR) announced the next steps in the process of imposing an additional tariff of 10% on approximately $300 billion of Chinese imports. The release announced some products will not be subject to the additional 10% tariff and included: (1) a list of products for which the 10% tariff will be imposed as of 1 September 2019; and (2) a list of certain products for which the additional 10% tariff will be delayed to 15 December 2019.
  • U.S. Customs and Border Protection (CBP) released a notice of proposed rulemaking that would amend the CBP regulations to require customs brokers to collect certain information from importers to enable the customs brokers to verify the identity of importers, including nonresident importers.
  • CBP released a notice announcing a test of new functionalities related to the electronic entry filing for low-valued shipments through the Automated Commercial Environment (ACE). The test will start no earlier than 28 September 2019, and will continue until CBP issues an announcement in the Federal Register.

Read TaxNewsFlash-Trade & Customs

Indirect Tax

  • Zimbabwe: The 2019 mid-term fiscal policy review statement proposed an excise tax increase on fuel, tobacco, and alcohol products, but reflected no changes to the VAT registration threshold.
  • Nigeria: The tax authority issued a notice concerning the withholding tax and VAT treatment of commissions, rebates, and other payments made by companies to distributors, dealers, and agents.
  • Czech Republic: The tax authority issued guidance clarifying the application of VAT on various types of vouchers.
  • Canada: A KPMG guide examines certain tax fundamentals with regard to the real estate sector and includes discussions of indirect tax (GST/HST) issues affecting the Canadian real estate industry.
  • United States: The Texas Comptroller proposed that the Wayfair nexus holding would apply to the Texas franchise tax. 

Read TaxNewsFlash-Indirect Tax

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