close
Share with your friends

KPMG’s Week in Tax: 27 - 31 January 2020

KPMG’s Week in Tax: 27 - 31 January 2020

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

1000

Related content

Transfer Pricing

  • OECD: The Organisaton for Economic Cooperation and Development issued a release reaffirming its commitment to reach a consensus-based long-term solution to the tax challenges arising from the digitalisation of the economy, including a possible safe harbor under the “Pillar One” approach. The OECD stated that it will continue working toward an agreement by the end of 2020.

Read TaxNewsFlash-Transfer Pricing

Asia Pacific

  • Taiwan: The Ministry of Finance has introduced special investment incentive measures regarding the calculation of the surtax that is imposed on undistributed corporate earnings. Under this investment incentive regime, the amount of the qualified investments made by a company can now be one of the items that can be deducted in calculating the amount of the surtax liability.
  • India: The Gujarat High Court held that no goods and services tax (GST) is to be imposed on the transportation (ocean freight) and specifically regarding transport services provided by a person outside India on transporting the goods into India.
  • Kazakhstan: Two relief provisions for small businesses—a three-year tax benefits regime and a moratorium on inspections for small and micro enterprises—are effective beginning 1 January 2020.
  • Oman: The Minister of Commerce and Industry has confirmed that a value added tax (VAT) will be introduced in Oman beginning in 2021.

Read TaxNewsFlash-Asia Pacific

Europe

  • Italy: Two new income tax rules for foreign trusts introduced at the end of 2019 concern (1) distributions by foreign discretionary trusts and (2) distributions of income vs. distributions of principal. Also, new tax rules concerning non-commercial partnerships and non-commercial entities (1) introduce a special system of taxation for Italian dividends received by resident non-commercial partnerships, and (2) extend the IVAFE (the wealth tax on financial assets) and IVIE (the wealth tax on foreign real estate) to resident non-commercial partnerships and non-commercial entities.
  • Switzerland: The federal law on tax reform and AHV financing (TRAF) has implications for certain individual taxpayers concerning qualifying shareholders, dividend distribution, and transpositions.
  • Lithuania: Amendments to the law on corporate income tax in Lithuania are effective beginning 1 January 2020. The amendments concern the increased taxation of credit institutions’ profits earned during the tax periods 2020-2022 in Lithuania.

Read TaxNewsFlash-Europe

Africa

  • Senegal: Amendments to tax provisions in the Finance Bill for 2019 mostly concern the hydrocarbon sector. The Finance Bill for 2020 introduced tax incentives for small and medium-sized enterprises (SMEs) in the digital sector. In addition, there are tax implications for onshore/offshore contract split tax issues.
  • South Africa: Guidance to implement carbon tax rules may provide taxpayers greater clarity regarding their carbon tax exposure. The first carbon tax payment will be due by the end of July 2020.

Read TaxNewsFlash-Africa

FATCA / IGA / CRS

  • Bulgaria: According to instructions for reporting under the automatic exchange of financial information (AEOI) regime, financial institutions that did not provide data regarding the place of birth of natural persons with existing accounts but that were obligated to collect the information must now collect and report this information by 30 June 2020, with the 2019 reporting information.

Read TaxNewsFlash-FATCA / IGA / CRS

United States

  • Final regulations adopt regulations as proposed in 2017 concerning the due dates and available extensions of time to file certain tax returns and information returns, and remove corresponding temporary regulations. The temporary regulations are removed and the 2017 proposed regulations are adopted “with only nonsubstantive revisions.”
  • Puerto Rico’s Treasury Department issued two sets of guidance that concern: (1) the procedures for submitting a report to deduct expenses for alternate basic income tax and alternative minimum tax; and (2) persons responsible for filing the information return for payments related to advertising, insurance premiums, telecommunication, internet access and cable or satellite television services.
  • Rev. Rul. 2020-4 clarifies how to properly compute the income limits applicable to the low-income housing credit under section 42 and addresses the additional income limits available in the average income test.
  • The IRS released a “practice unit” that is titled: Overview of the enhanced oil recovery tax credit.
  • Taxpayers must resume making semi-monthly deposits of the oil spill liability tax. A semi-monthly period is the first 15 days of a calendar month or the portion of a calendar month following the 15th day of the month. The first deposit was due 29 January 2020.
  • A KPMG report provides information and observations regarding the implications of selected provisions of “The Further Consolidated Appropriations Act, 2020” (Pub. L. No. 116-94) that may be of interest to the healthcare industry.
  • A KPMG report examines the proposed Regulations that expand the scope of the $1 million section 162(m) deduction limitation on certain executive compensation paid by public companies.
  • The Louisiana Supreme Court held that an online marketplace facilitator was not a “dealer” required to collect and remit parish (local) sales and use tax on transactions in which third-party retailers sold goods using the taxpayer’s online market place.
  • State and local entities in Arkansas, Georgia, Louisiana, and North Carolina have continued to respond to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. and in particular with respect to sales tax obligations for remote sales and transactions involving marketplace facilitators.
  • The Arkansas Office of Hearings and Appeals upheld the imposition of use tax on the original purchase price of a trailer. The trailer was purchased and used outside Arkansas for seven years before the taxpayer brought it to Arkansas. However, because the taxpayer did not prove that tax was paid earlier, the assessment was upheld.
  • The Massachusetts governor’s proposed budget would require retailers that collect more than $100,000 in sales tax annually to begin remitting taxes from the first three weeks of the month in the final week of the same month. Remittances for the final week and reconciliation of the monthly filing would continue to occur in the following month. Moreover, the second phase of the proposal would require retailers and credit card processors to capture sales tax at the moment of purchase and remit taxes on credit card and other electronic transactions on a daily basis. This real-time remittance would begin in 2023.
  • Proposed legislation in New York, if enacted, would impose a 5% tax on the gross income of “every corporation that derives income from the data that New York individuals share with the corporation.” The bill provides few details on how to compute the tax, but does specify that revenues raised by the measure would be deposited into a newly created “New York data fund,” with a portion of the funds to be disbursed back to New York taxpayers. There is a similar bill pending in the state senate.

Read TaxNewsFlash-United States

Trade & Customs

  • President Trump signed legislation to implement the United States-Mexico-Canada Agreement (USMCA)—the agreement to replace the North American Free Trade Agreement (NAFTA).
  • The U.S. Court of International Trade issued an opinion in a case concerning “substitution drawbacks” of companies importing and exporting wine. The trade court held that final regulations issued by Customs and Border Protection (CBP) and Treasury in 2019 to stop “double drawback” in the wine industry was unlawful.
  • An article written by KPMG Trade & Customs professionals highlights that for many organizations, developing an effective response to address risks of an intensifying global trade war has presented a significant challenge.

Read TaxNewsFlash-Trade & Customs

Exempt Organizations

  • The IRS issued a summary of the implications for tax-exempt organizations of the “The Further Consolidated Appropriations Act, 2020” (Pub. L. No. 116-94). Changes include (1) repeal of “parking lot tax” on exempt employers, (2) tax simplification for private foundations, and (3) exclusion of certain government grants by exempt utility cooperatives

Read TaxNewsFlash-Exempt Organizations

Indirect Tax

  • India: The Gujarat High Court held that no GST is to be imposed on the transportation (ocean freight) and specifically regarding transport services provided by a person outside India on transporting the goods into India.
  • Italy: New tax rules extend the IVAFE (the wealth tax on financial assets) and IVIE (the wealth tax on foreign real estate) to resident non-commercial partnerships and non-commercial entities.
  • Oman: The Minister of Commerce and Industry has confirmed that a VAT will be introduced in Oman beginning in 2021.
  • South Africa: Guidance to implement carbon tax rules may provide taxpayers greater clarity regarding their carbon tax exposure. The first carbon tax payment will be due by the end of July 2020.
  • United States: The Louisiana Supreme Court held that an online marketplace facilitator was not a “dealer” required to collect and remit parish (local) sales and use tax on transactions in which third-party retailers sold goods using the taxpayer’s online market place.
  • United States: The medical device excise tax was repealed by “The Further Consolidated Appropriations Act, 2020” (Pub. L. No. 116-94). The bill also includes other healthcare-related tax changes.
  • United States: Taxpayers must resume making semi-monthly deposits of the oil spill liability tax. A semi-monthly period is the first 15 days of a calendar month or the portion of a calendar month following the 15th day of the month. The first deposit was due 29 January 2020.
  • United States: The U.S. Court of International Trade issued an opinion in a case concerning “substitution drawbacks” of companies importing and exporting wine. The trade court held that final regulations issued by CBP and Treasury in 2019 to stop “double drawback” in the wine industry was unlawful.
  • United States: State and local entities in Arkansas, Georgia, Louisiana, and North Carolina have continued to respond to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. and in particular with respect to sales tax obligations for remote sales and transactions involving marketplace facilitators.
  • United States: The Arkansas Office of Hearings and Appeals upheld the imposition of use tax on the original purchase price of a trailer. The trailer was purchased and used outside Arkansas for seven years before the taxpayer brought it to Arkansas. However, because the taxpayer did not prove that tax was paid earlier, the assessment was upheld.
  • United States: The Massachusetts governor’s proposed budget would require retailers that collect more than $100,000 in sales tax annually to begin remitting taxes from the first three weeks of the month in the final week of the same month. The second phase of the proposal would require retailers and credit card processors to capture sales tax at the moment of purchase and remit taxes on credit card and other electronic transactions on a daily basis. This real-time remittance would begin in 2023.
  • United States: Proposed legislation in New York, if enacted, would impose a 5% tax on the gross income of “every corporation that derives income from the data that New York individuals share with the corporation.”

Read TaxNewsFlash-Indirect Tax

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained 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