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KPMG’s Week in Tax: 19 - 23 August 2019

KPMG’s Week in Tax: 19 - 23 August 2019

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

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Europe

  • Germany: The Ministry of Finance (BMF) extended the deadline for investment funds to file a refund claim on behalf of tax-exempt investors with a German paying agent or sub-custodian, for dividends distributed before 1 July 2018. The new deadline is 31 December 2019.
  • Poland: Existing companies must notify a central register of ultimate beneficial owners by 13 April 2020 (six months following the 13 October 2019 implementation date).
  • Italy: The tax authorities issued an implementing decree regarding the tax reporting requirements for remote (distance or electronic) sales. Under the decree, the first deadline under the new reporting requirements is 31 October 2019.
  • Cyprus: The tax authorities released guidance concerning the value added tax (VAT) treatment of services that are usually provided by retirement homes.
  • Norway: A proposal to amend the Norwegian regulations relating to low-value shipments would include a new registration process intended to simplify customs clearances of eligible shipments and to provide a simplified VAT system.

Read TaxNewsFlash-Europe

 

FATCA / IGA / CRS

  • Switzerland: The exchange of financial account information under the automatic exchange of information (AEOI) provisions with 33 jurisdictions will begin in September 2019.
  • United States: The IRS posted a draft version of instructions for Form 8966 with respect to FATCA reporting for 2019.

Read TaxNewsFlash-FATCA / IGA / CRS

 

United States

  • Notice 2019-46 provides penalty relief for domestic partnerships or S corporations that, as the U.S. shareholder of a controlled foreign corporation (CFC), applied the rules provided by the proposed regulations under section 951A—related to the treatment of domestic partnerships and S corporations for determining the amount of the global intangible low-taxed income inclusion (GILTI)—for tax years ending before June 22, 2019. 
  • Proposed regulations concern the special valuation rules for employers and employees to use in determining the amount to include in an employee’s gross income for personal use of an employer-provided vehicle.
  • A KPMG LLP report examines base erosion and anti-abuse tax (BEAT) considerations for non-life insurance companies.
  • OMB’s Office of Information and Regulatory Affairs (OIRA) completed its review of proposed regulations under section 451(b) and (c) concerning the timing of income rules used by accrual method taxpayers.
  • A directive from IRS divisions provides guidance for IRS examiners on the creditability of two French social taxes—the “contribution sociale généralisée” (CSG) and the "contribution pour le remboursement de la dette sociale" (CRDS)—for U.S. federal income tax purposes. The directive states a change in IRS policy, specifically that the IRS no longer maintains its position that the CSG and CRDS are ineligible for a foreign tax credit under section 901.
  • The Office of the U.S. Trade Representative (USTR) held a public hearing with regard to the U.S. investigation of France’s digital services tax.
  • The Florida Department of Revenue issued guidance on certain federal tax reform-related items—specifically global intangible low-taxed income (GILTI) and bonus depreciation. The guidance reminds taxpayers that Florida continues to require an addback of bonus depreciation that is then deductible over a seven-year period.
  • A Louisiana appeals court held that the state’s constitutional prohibition against imposing sales and use taxes on “prescription drugs” extends to medical devices.
  • A New York state appellate tribunal held that a taxpayer’s receipts from web-based litigation support services were “other business receipts” and not “service receipts.” Under New York law (as in effect at the time), service receipts were generally sourced to the location where the services were performed, whereas receipts classified as “other business receipts” were sourced to the location where the receipts were earned.

Read TaxNewsFlash-United States

 

Trade & Customs

  • The U.S. International Trade Commission (ITC) determined that a U.S. industry is materially injured by reason of imports of steel racks from China.
  • The U.S. Trade Representative announced additional duties at a rate of 10% will apply on certain imports from China that are entered into the United States on or after 1 September 2019. The additional 10% customs duties will apply on other imports that are entered on or after 15 December 2019.
  • The Bureau of Industry and Security (BIS) of the U.S. Commerce Department issued two final rules (1) identifying 46 additional Huawei affiliates that require inclusion on the “Entity List” and (2) extending a “temporary general license” authorizing specific, limited engagements in transactions involving the export, re-export, and transfer of items to Huawei and its non-U.S. affiliates that are subject to the Entity List.
  • The USTR held a public hearing with regard to the U.S. investigation of France’s digital services tax.

Read TaxNewsFlash-Trade & Customs

 

Indirect Tax

  • Italy: The tax authorities issued an implementing decree regarding the tax reporting requirements for remote (electronic or distance) sales. Under the decree, the first deadline under the new reporting requirements is 31 October 2019.
  • Costa Rica: A form and instructions—posted on the tax authority’s website—are to be used to register certain taxpayers for VAT purposes.
  • Cyprus: The tax authorities released guidance concerning the VAT treatment of services provided by retirement homes.
  • Middle East and South Asia: A KPMG report provides an overview of tax systems of 14 countries in the Middle East and South Asia, including the VAT and excise tax regimes in those countries.
  • Norway: A proposal to amend the Norwegian regulations relating to low-value shipments would aim to simplify customs clearances of eligible shipments and provide a simplified VAT system.
  • United States: A Louisiana appeals court held that the state’s constitutional prohibition against imposing sales and use taxes on “prescription drugs” also applies to medical devices.
  • United States: A New York state appellate tribunal held that a taxpayer’s receipts from web-based litigation support services were “other business receipts” and not “service receipts.”

Read TaxNewsFlash-Indirect Tax

 

Asia Pacific

  • Australia: An update from the Australian Taxation Office (ATO) reflects the ongoing expansion of global cooperation regarding the administration and collection of tax.
  • India: The Central Board of Direct Taxes (CBDT) issued a circular clarifying the tax treatment of “farm-in expenditures” (the amounts paid for acquiring a participating interest) incurred by oil exploration and production companies.
  • India: The CBDT issued “frequently asked questions” (FAQs) to clarify certain filing rules relating to income tax returns for assessment year 2019-2020. 
  • India: The Authority for Advance Ruling, Tamil Nadu, issued a ruling addressing when a supply is to be treated as being made “without consideration.”
  • Middle East and South Asia: A KPMG report provides an overview of tax systems of 14 countries in the Middle East and South Asia.

Read TaxNewsFlash-Asia Pacific

 

Africa

  • Nigeria: The Federal Inland Revenue Service (FIRS) issued a notice informing companies with bank accounts currently under a tax lien “freeze” of the need to regularize their tax status within 30 days.

Read TaxNewsFlash-Africa

 

Americas

  • Costa Rica: A form and instructions—posted on the tax authority’s website—are to be used to register certain taxpayers for VAT purposes.

Read TaxNewsFlash-Americas

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