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KPMG’s Week in Tax: 2 - 6 September 2019

KPMG’s Week in Tax: 2 - 6 September 2019

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

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Transfer Pricing

  • Australia: The Federal Court of Australia held for the taxpayer in a marketing hub dispute. The court decided the taxpayer had satisfied its burden of proof with the comparables that the taxpayer provided in relation to the transfer prices used on certain cross-border related-party transactions between its copper mining operations and its Swiss-based trading entity.
  • Ireland: A “feedback statement” in response to the public consultation launched earlier this year regarding Ireland’s transfer pricing regime provides a summary of the proposed changes being considered and includes draft wording for legislative purposes. There is an opportunity to provide feedback to the Department of Finance (by 13 September 2019).

Read TaxNewsFlash-Transfer Pricing

BEPS

  • Japan-India: The Government of Japan released “synthesised text” with respect to the income tax treaty between Japan and India as modified by the multilateral instrument (MLI) that implements tax treaty-related measures under the base erosion and profit shifting (BEPS) project.
  • OECD: The outcomes of the second phase of peer review of the BEPS Action 13 country-by-country (CbC) reporting initiative were released.

Read TaxNewsFlash-BEPS

FATCA / IGA / CRS

  • Cayman Islands: The automatic exchange of information (AEOI) portal is currently offline to facilitate transmission of FATCA and the common reporting standard (CRS) returns to partner jurisdictions. The portal will reopen on 7 October 2019, and will remain open until 29 November 2019, for users to check on previously submitted returns (for example, to address errors) and to submit any outstanding returns.
  • France: Guidance provides French financial institutions with technical descriptions and specifications required for the transmission of FATCA and common reporting standard (CRS) reports.
  • Netherlands: Responses from the government address parliamentary questions about “recalcitrant account holders” and the intergovernmental agreement (IGA).
  • Belgium: An online portal is making preparations for processing CRS reports received and then for sending these CRS reports to the concerned partner states. 

Read TaxNewsFlash-FATCA / IGA / CRS

Europe

  • Sweden: The government announced its plans to re-introduce an “economic employer” concept for the taxation of employees who work temporarily in Sweden.
  • Sweden: The tax authority has clarified the rules regarding the tax treatment for employers of health insurance provided to employees.
  • France: The European Commission is holding a public consultation with regard to excise tax relief provided for rum produced in French overseas territories. 
  • Netherlands: The EC approved the extension and expansion of three amendments to the Dutch tonnage tax regime until 31 December 2028.
  • Switzerland: Zurich voters approved a proposal to implement the tax reform plan (Tax Reform and AHV Financing) in the canton.
  • Switzerland: The Federal Supreme Court issued a decision on the value added tax (VAT) treatment of “intermediary services” by Swiss institutions.
  • Poland: A new law adds rules concerning the tax treatment of “bad debts.” The law’s effective date is 1 January 2020.
  • Russia: Income distributed by a Russian company to a foreign company is subject to Russian withholding tax (at a rate of 15% for dividends and a 20% rate for royalties, interest, and other income unless the rate is reduced by applicable provisions of an income tax treaty).

Read TaxNewsFlash-Europe

Africa

  • Mauritius: Clarifications to certain tax measures concerning the controlled foreign company (CFC) rules and partial tax exemption, among other items that were included in the Finance Act of 2019, have been released.
  • Nigeria: A tax tribunal delivered a taxpayer-favorable judgment in a case concerning a state-level tax dispute, finding that the tax assessments were barred by the statute of limitations.

Read TaxNewsFlash-Africa

Americas

  • Brazil: Guidance that establishes a system of governance with respect to social contributions is intended to simplify and improve reporting obligations

Read TaxNewsFlash-Americas

Asia Pacific

  • Australia: There are recommendations from a commission to change the fringe benefits tax rules that would, in part, reduce an exemption for employer-provided housing.
  • Vietnam: Guidance issued by Vietnam’s state bank concerning foreign direct investment has an effective date of 6 September 2019.
  • Singapore: The tax authority announced that administrative concessions that have allowed Singapore individuals to elect to be treated as non-residents for tax purposes will no longer be available. This change could impose additional tax obligations for Singapore employees and their overseas employers.

Read TaxNewsFlash-Asia Pacific

United States

  • Proposed regulations concerning the timing of income inclusion under section 451 were released by Treasury and the IRS. The regulations reflect legislative changes made by the 2017 U.S. tax law (Pub. L. No. 115-97), the law that is often referred to as the “Tax Cuts and Jobs Act."
  • The IRS announced that it will not impose a penalty when dyed diesel fuel is sold for use or is used on the highway in Florida because of Hurricane Dorian. The relief is effective immediately, and will continue through 15 September 2019.
  • Notice 2019-50 sets forth the “applicable amount” of an annual fee imposed by a provision of the Affordable Care Act on covered entities that provide health insurance for U.S. health risks. The applicable amount of the fee for 2020 is $15,522,820,037.

Read TaxNewsFlash-United States

Trade & Customs

  • The U.S. International Trade Commission announced that would not revoke existing antidumping and countervailing duty orders on imports of circular welded carbon quality steel line pipe from China.
  • The U.S. Commerce Department announced affirmative preliminary determinations in the antidumping duty investigations of imports of certain fabricated structural steel from China and Mexico.
  • The U.S. Treasury Department, Office of Foreign Assets Control (OFAC), announced updates to and publication of new “frequently asked questions” (FAQs) regarding bunkering of non-Iranian and Iranian vessels carrying goods to or from Iran.
  • The first tranche of Chinese tariffs on U.S. goods of a value equal to U.S. $75 billion and including a 5% tariff on U.S. crude oil was effective beginning September 2019.

Read TaxNewsFlash-Trade & Customs

Indirect Tax

  • EU: An EC release reports EU countries lost €137 billion in value added tax (VAT) revenues in 2017—that is, the “VAT gap” (the overall difference between the expected VAT revenue and the amount actually collected) for 2017.
  • France: The EC is holding an open public consultation concerning its evaluation of excise tax relief for rum produced in French overseas territories.
  • Netherlands: The EC approved the extension and expansion of three amendments to the Dutch tonnage tax regime until 31 December 2028.
  • Switzerland: A court decision on the VAT treatment of “intermediary services” by Swiss institutions confirmed that a direct proxy is no longer mandatory under the Swiss VAT law.
  • United States: The IRS announced that it will not impose a penalty when dyed diesel fuel is sold for use or is used on the highway in Florida because of Hurricane Dorian.
  • United States: Notice 2019-50 sets forth the “applicable amount” of an annual fee imposed on health insurance providers. 

Read TaxNewsFlash-Indirect Tax

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