close
Share with your friends

KPMG’s Week in Tax: 16 - 20 September 2019

KPMG’s Week in Tax: 16 - 20 September 2019

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

1000

Related content

United States

  • The U.S. Treasury Department and IRS officially released for publication in the Federal Register final regulations and proposed regulations under section 168(k) relating to the 100% additional first-year depreciation deduction that allows businesses to write off most depreciable business assets in the year they are placed in service by the business.
  • OMB’s Office of Information and Regulatory Affairs (OIRA) received for review from the U.S. Treasury Department two sets of regulations under section 59A—the “base erosion and anti-abuse tax” (BEAT) provision under the 2017 U.S. tax law.
  • Proposed rules released jointly by several U.S. government agencies would amend the Federal Acquisition Regulation (FAR): (1) to withhold a 2% tax on contract payments made by the U.S. government to foreign persons pursuant to certain contracts; and (2) concerning an exemption from Afghanistan taxes for contracts performed in Afghanistan.
  • Notice 2019-52 applies with respect to wildfires in certain California counties, and expands the emergency housing and compliance monitoring relief that was previously provided by Rev. Procs. 2014-49 and 2014-50.
  • The U.S. Court of Appeals for the Second Circuit vacated a judgment of a federal district court and transferred a taxpayer’s claim for overpayment interest on a delayed tax refund to the U.S. Court of Federal Claims. The Second Circuit held that jurisdiction over the taxpayer’s claim for overpayment interest lies exclusively with the Court of Federal Claims.
  • Florida corporate taxpayers are required to report certain tax information to the Department of Revenue for tax years beginning during the 2018 and 2019 calendar years.
  • The Florida Department of Revenue announced the corporate income tax rate is reduced from 5.5% to 4.458% for tax years beginning on or after 1 January 2019, but before 1 January 2022, and that further reductions in the corporate income tax rate are possible for tax years beginning on or after 1 January 2020 and 1 January 2021.
  • New law in New Hampshire adopts market-based sourcing rules for purposes of the state’s business profits tax and business enterprise tax.
  • A South Carolina administrative law judge ruled an online marketplace that facilitated sales for third-party merchants must collect sales and use tax on sales to South Carolina customers (for the tax period  1 January 2016 through 31 March 2016—which pre-dated the Wayfair decision).
  • A Texas rule concerns changes to the definition of when a taxable entity is considered “primarily engaged in a retail or wholesale trade” for purposes of whether the taxpayer may be allowed a reduced franchise tax rate.

Read TaxNewsFlash-United States
 

  • The U.S. Senate Finance Committee released the health tax taskforce report. The health tax taskforce was charged with examining six temporary tax policies in the health area (expiring between 31 December 2017 and 31 December 2019).

Read TaxNewsFlash-Legislative Updates

Americas

  • Mexico: A tax reform legislative initiative was presented to the Mexican Congress, and among the proposals in the tax reform package are measures that would revise the tax treatment of: (1) income of foreign “transparent entities” and (2) income relating to the digital economy.
  • Venezuela: A net worth tax is imposed on taxpayers having a net worth exceeding 150,000,000 “tax units” (approximately U.S. $348,000). The initial return for the net worth tax is due on or before 30 November 2019.

Read TaxNewsFlash-Americas

Asia Pacific

  • Indonesia: Guidance provides greater clarity regarding the taxation of distributions from controlled foreign corporations (CFCs).
  • Myanmar: Guidance concerning the calculation of taxable income by individual taxpayers for the “short” financial year ending 30 September 2019 clarifies how to calculate the amount of taxable income.
  • New Zealand: A consultation document on the rules for taxing certain real estate sales includes proposed rules that aim at instances when there is a pattern of buying and selling property.
  • Australia: Changes to Australia’s offshore banking unit regime are expected, and there are some indications that the regime could even be repealed.
  • India: The Kolkata Bench of the Income-tax Appellate Tribunal held that long-term capital loss arising on the sale of listed shares (income from which is exempt from tax) can be carried forward and set-off against other long-term capital gain.
  • India: The Delhi Tribunal held that provisions of section 56(2)(vii)(c) of the Income-tax Act, 1961 do not apply with regard to bonus shares because, concerning bonus shares, there is neither any increase nor decrease in the wealth of the shareholder.
  • Hong Kong: Legislation would provide “special rates” for vacant “first-hand” private residential units with an occupation permit issued for 12 months or more.

Read TaxNewsFlash-Asia Pacific

Europe

  • Netherlands: The “2020 Tax Plan”—presented this week before the Lower House—includes tax measures that generally focus on lowering labor costs, addressing tax avoidance and tax evasion, providing an attractive business climate for economic activities of substance, and further focusing on environmental measures. Many of the proposed measures would have an effective date of 1 January 2020.
  • Austria: Tax developments include updates about VAT, labor law-related amendments, and reportable cross-border arrangements for the implementation of the EU directive “DAC 6.”
  • Germany: The German federal cabinet approved a draft bill that would implement EU “quick fixes” for the VAT treatment of chain transactions in the European Union, among other measures. It is proposed that the measures would have an effective date of 1 January 2020.
  • Belgium: The European Commission has opened “separate” in-depth investigations as to  whether Belgium’s “excess profit” tax rulings granted to 39 multinational companies were in breach of the EU state aid rules. 

Read TaxNewsFlash-Europe

Africa

  • Nigeria: The Tax Appeal Tribunal (sitting in Lagos) issued a decision concluding that a taxpayer can communicate its objection to a notice of assessment by electronic or physical means; the tribunal held that provisions of the Companies Income Tax Act do not prescribe the mode of objection in writing.

Read TaxNewsFlash-Africa

Transfer Pricing

  • OECD: Dispute resolution statistics were released from 89 jurisdictions and concerning mutual agreement procedure (MAP) cases.

Read TaxNewsFlash-Transfer Pricing

FATCA / IGA / CRS

  • Saint Vincent and the Grenadines: The government of Saint Vincent and the Grenadines has once again extended the deadline for submitting FATCA and common reporting standard (CRS) reports. The new deadline is 20 September 2019.
  • EU: The European Union has published an updated list of accounts to be treated as excepted accounts, and an updated list of entities to be treated as non-reporting financial institutions under the CRS regime.
  • Australia: There is an update to a “package content note” as guidance for software developers that are interested in developing CRS services for an electronic platform.
  • UK: Updates to the guidance on the automatic exchange of information (AEOI) include a “privacy notice” that explains how HMRC collects and uses the personal data received from UK financial institutions and overseas tax authorities in relation to AEOI agreements.

Read TaxNewsFlash-FATCA / IGA / CRS

Trade & Customs

  • United States: The Office of the U.S. Trade Representative released three notices of product exclusions with regard to additional customs duties imposed on certain imports into the United States from China.
  • United States:  The U.S. International Trade Commission announced its determination that a U.S. industry is “materially injured” by reason of imports of glycine from Thailand that the U.S. Commerce Department determined are sold in the United States at less than fair value.
  • United States: U.S. Customs and Border Protection released a general notice providing that with regard to imports into the United States of steel products from South Korea, the entry summaries must be accompanied by valid and properly executed certificates of exportation.
  • EU: The European Commission announced statistics of the number of interceptions of “fake goods” being imported into the EU from 2018.

Read TaxNewsFlash-Trade & Customs

Indirect Tax

  • Bangladesh: New VAT measures, effective 1 July 2019, include provisions concerning application of the VAT rules and concerning payment and VAT compliance.
  • Austria: Recent court decisions concern the VAT treatment of lease contracts, roaming charges, and rental real property.
  • Germany: The German federal cabinet approved the government’s draft bill that would implement EU “quick fixes” for the VAT treatment of chain transactions in the European Union, among other measures.
  • New Zealand: A consultation document on the rules for taxing real estate sales includes a proposal to address situations when there is a pattern of buying and selling property.
  • Venezuela: The initial return for the net worth tax is due on or before 30 November 2019.
  • Hong Kong: Legislation would provide “special rates” for vacant “first-hand” private residential units with an occupation permit issued for 12 months or more, unless the units have been sold or have been leased for over 183 days during the reporting period.
  • Mexico: Tax measures included in the economic legislative package for 2020 include measures for taxation of the digital economy and VAT on digital services.
  • United States: A proposed rule would amend the Federal Acquisition Regulation (FAR) concerning the 2% withholding tax on payments made by the U.S. government to foreign persons pursuant to certain contracts. The proposed rule would apply with regard to federal government contracts for goods or services that are awarded to foreign persons.
  • United States: New law in New Hampshire adopts market-based sourcing rules for purposes of the state’s business profits tax and business enterprise tax.
  • United States: A South Carolina administrative law judge concluded an online marketplace that facilitated sales for third-party merchants must collect sales and use tax on sales to South Carolina customers (for the tax period 1 January 2016, through 31 March 2016—which pre-dated the Wayfair decision).
  • United States: A rule in Texas concerns changes to the definition of when a taxable entity is considered “primarily engaged in a retail or wholesale trade” for purposes of whether the taxpayer may be allowed a reduced franchise tax rate.

Read TaxNewsFlash-Indirect Tax

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal