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KPMG’s Week in Tax: 13 - 17 January 2020

KPMG’s Week in Tax: 13 - 17 January 2020

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

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Europe

  • Slovenia: The value added tax (VAT) law in Slovenia was amended to reflect implementation of EU VAT rules. The measures are effective beginning 1 January 2020.
  • France: The Finance Law for 2020 includes corporate tax measures that may affect foreign taxpayers and their business operations in France. Included are provisions concerning the corporate income tax rate, changes to withholding tax on payments to non-residents, branch remittance tax changes, and hybrid mismatch arrangements.
  • France: Tax measures and recent guidance set forth the tax compliance and reporting obligations of online platforms in France. The first declaration to the French tax authorities is due before 31 January 2020.
  • Netherlands: A value added tax (VAT) correction may be required concerning the VAT deduction exclusion decree and the private use of company cars.
  • Switzerland: New tax law in the canton of Zug incudes a new effective corporate income tax rate. There are also measures addressing profits from patents and comparable rights and research and development expenses for the calculation of the taxable profit, and transitional measures with regard to hidden reserves.
  • EU: A report summarizes the status of the implementation of the mandatory disclosure requirements into EU Member States’ domestic legislation that must be effective 1 July 2020.
  • EU: A report reviews recent EU tax developments and implications of Court of Justice of the European Union (CJEU) judgments.

Read TaxNewsFlash-Europe

Transfer Pricing and BEPS

  • Panama: A portal for country-by-country (CbC) reporting in Panama is now available for the presentation and notification of CbC reports. The filing deadline for the CbC report corresponding to fiscal year 2018 was extended until 31 January 2020.

Read TaxNewsFlash

Africa

  • Nigeria: The Finance Act, 2020 introduces changes to various tax regimes in Nigeria including amendments to the companies income tax, VAT, petroleum profits tax, individual (personal) income tax, capital gains tax, customs and excise tax, and stamp duty (tax). There are also measures concerning the taxation of digital or electronic commerce.
  • Nigeria: Implementation of a value added tax (VAT) rate of 7.5% will be effective beginning 1 February 2020.
  • Nigeria: The deadline is 31 January 2020 for employers filing Pay-As-You-Earn (PAYE) tax returns for 2019.
  • Nigeria: The National Pension Commission has directed all pension fund administrators to stop opening death-benefit accounts for legal beneficiaries of deceased employees, effective 31 January 2020. The discontinuation of this use of death-benefit accounts is to encourage all employees to open their retirement savings accounts during the course of their employment.

Read TaxNewsFlash-Africa

Americas

  • Canada: Many employers that offer taxable benefits to their employees must remit amounts of goods and services tax / harmonized sales tax (GST/HST) and Quebec sales tax (QST) related to these benefits by 31 March 2020.
  • Canada: Media organizations can now prepare and submit to the Canada Revenue Agency (CRA) applications in order to determine if they qualify for a new refundable labour tax credit that is available for the news industry.
  • Mexico: The values of the “unit of measure and update” (unidad de medida y actualización—UMA) were published in the official gazette. The UMA values are federally established and have implications for tax and social security contribution determinations.

Read TaxNewsFlash-Americas

Asia Pacific

  • China and Hong Kong: The income tax arrangement between China and Hong Kong includes tax exemptions for certain teachers and researchers.
  • China: Guidance generally confirms the policy under the individual income tax rules for charitable donations. The measures are effective retroactively from 1 January 2019.

Read TaxNewsFlash-Asia Pacific

FATCA / IGA / CRS

  • Canada: The Canada Revenue Agency issued an updated XML schema for reporting information under the FATCA and common reporting standard (CRS) regimes.
  • Cayman Islands: A new AEOI portal will be launched in two phases over the first and second quarters of 2020.
  • Hungary: Updated versions of filing instructions have been issued concerning the FATCA regime and the automatic exchange of financial information (AEOI) under the CRS regime.
  • India: Updated user guides under the FATCA and CRS regimes concern the information request utility, updating the “Preparation of Response to Information Request” section, and a quick reference guide.
  • Japan: Updated “frequently asked questions” (FAQs) were published concerning the CRS regime.
  • Russia: The tax authority issued an updated version of CRS guidance in the form of FAQs.
  • UK: HM Revenue & Customs (HMRC) issued updates to the international exchange of information manual.

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • The IRS will return sequestered funds to businesses that were affected by a recent Office of Management and Budget (OMB) determination. The IRS will restore certain amounts sequestered since 2013 under section 168(k)(4).
  • OMB’s Office of Information and Regulatory Affairs (OIRA) received for review proposed regulations concerning short-term capital gain with respect to applicable partnership interests—that is, the measures often referred to as the “carried interest” rules.
  • OIRA completed its review of final regulations concerning special rules under section 468A for nuclear decommissioning costs.
  • A public hearing is scheduled for 11 February 2020 on proposed regulations regarding the classification of cloud transactions for purposes of the U.S. tax law’s international provisions.
  • Notice 2020-8 provides guidance for making a one-time claim for payment of the credits and payments allowable for biodiesel—including renewable diesel—mixtures and alternative fuels sold or used during calendar years 2018 and 2019.
  • Guidance in Alabama and Ohio concerns tax law changes affecting financial institutions. The measures are effective beginning in 2020.
  • The U.S. Court of Appeals for the Tenth Circuit affirmed a federal district court’s conclusion that there are no rights of redemption by a delinquent taxpayer following court-ordered sales to enforce federal tax liens pursuant to section 7403.
  • A report from KPMG provides examples of comments about accounting for income taxes recently issued by the U.S. Securities and Exchange Commission (SEC) to registrants.
  • In response to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc.:
    • The Alaska Remote Seller Sales Tax Commission approved a uniform ordinance addressing the sales tax obligations of remote sellers and marketplace facilitators.
    • The Illinois Department of Revenue issued guidance addressing the use tax obligations of marketplace facilitators.
  • A Colorado appeals court denied a taxpayer’s claim for refund of use tax paid to a city with regard to master licensing agreements that the taxpayer (a movie theatre) entered into with film distributors.
  • A Michigan appeals court remanded to a lower court a case concerning whether a passive holding company formed to hold an investment was subject to Detroit’s city income tax.
  • Missouri’s high court held that a telecommunications company owed local license taxes to several Missouri cities.

Read TaxNewsFlash-United States
 

  • The staff of the Joint Committee on Taxation (JCT) released a report that lists federal tax provisions (other than those providing time-limited transaction relief after the modification of an underlying rule) that are currently scheduled to expire during the period 2020-2029.

Read TaxNewsFlash-Legislative Updates

Trade & Customs

  • The U.S. Senate passed legislation to implement the United States, Mexico, and Canada (USMCA) agreement, to replace the North American Free Trade Agreement (NAFTA). The bill will now be sent to the White House for action by the president.
  • The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) updated a list of FAQs concerning sanctions imposed on trade with Iran.
  • The Office of the U.S. Trade Representative (USTR) released text and other information about the trade agreement—described as “Phase One”—between the United States and China.
  • The U.S. International Trade Commission (ITC) determined that a U.S. industry is not materially injured or threatened with material injury by reason of imports of dried tart cherries from Turkey.

Read TaxNewsFlash-Trade & Customs

Cooperatives

  • A KPMG report provides a reminder that the appropriations legislation signed in December 2019 modified rules for determining the tax-exempt status of certain mutual or cooperative telephone or electric companies.

Read TaxNewsFlash-Cooperatives

Indirect Tax

  • Canada: Many employers that offer taxable benefits to their employees must remit amounts of GST/HST and QST related to these benefits by 31 March 2020.
  • France: The Finance Law for 2020 introduces a new “naming and shaming” provision that requires publication—on the French tax administration’s website—of the identity of non-cooperative online platforms.
  • France: Tax measures and recent guidance set forth the tax compliance and reporting obligations of online platforms in France. The first declaration to the French tax authorities is due before 31 January 2020.
  • Netherlands: In the final Dutch VAT return of 2019, a VAT correction may be required concerning the VAT deduction exclusion decree and the private use of company cars.
  • Slovenia: The VAT law in Slovenia was amended to reflect implementation of EU VAT rules. The measures are effective beginning 1 January 2020.
  • United States: An IRS notice provides guidance for making a one-time claim for payment of the credits and payments allowable for biodiesel—including renewable diesel—mixtures and alternative fuels sold or used during calendar years 2018 and 2019.
  • United States: Measures in Alabama and Ohio concern tax law changes affecting financial institutions that are effective beginning in 2020.
  • United States: A public hearing is scheduled for 11 February 2020 on proposed regulations regarding the classification of cloud transactions for purposes of the U.S. tax law’s international provisions.
  • United States: The Alaska Remote Seller Sales Tax Commission approved a uniform ordinance addressing the sales tax obligations of remote sellers and marketplace facilitators.
  • United States: The Illinois Department of Revenue issued guidance addressing the use tax obligations of marketplace facilitators.
  • United States: A Colorado appeals court denied a taxpayer’s claim for refund of use tax paid to a city with regard to master licensing agreements that the taxpayer (a movie theatre) entered into with film distributors.
  • United States: Missouri’s high court held that a telecommunications company owed local license taxes to several Missouri cities.

Read TaxNewsFlash-Indirect Tax

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