KPMG’s Week in Tax: 8 - 12 June 2020

KPMG’s Week in Tax: 8 - 12 June 2020

Tax developments from around the globe continue to focus on tax and economic relief in response to the coronavirus (COVID-19) pandemic.

1000

Related content

COVID-19-related tax developments are not listed in this report. KPMG has multiple resources to monitor COVID-19 tax developments. Read Coronavirus (COVID-19) tax developments


The following focuses on non-COVID tax developments reported this week.

Europe

  • Poland: The Advocate General of the Court of Justice of the European Union (CJEU) delivered an opinion finding that the Polish rules on bad-debt relief are not compatible with EU law.
  • France: Final administrative regulations address the earnings stripping rules, effective for financial years opened on or after 1 January 2019.
  • Italy: Guidance clarifies the reporting obligations for remote (distance) sales, and is viewed as providing a strict (and unexpected) approach regarding the liability of marketplace operators.
  • Czech Republic: Instruments of ratification for the multilateral instrument (MLI) have been filed with the OECD. The MLI will cover 52 of 88 income tax treaties in the network of the Czech Republic's tax treaties.

Read TaxNewsFlash-Europe

Transfer Pricing

  • Australia: Guidelines for the mutual agreement procedure (MAP) and arbitration arrangements reflect modifications made (or to be made) in some of Australia’s tax treaties made under the “multilateral instrument” (MLI).
  • Canada: Statistics of the advance pricing arrangement (APA) program are provided for 2019.
  • United States: A KPMG report focuses on various factors and approaches tax directors might consider when determining if their current target profit margins are appropriate during the COVID-19 disruption and, if not, how they might adjust those target margins consistent with the arm’s length standard.

Read TaxNewsFlash-Transfer Pricing

Africa

  • Nigeria: The Federal Inland Revenue Service launched a new application portal for tax clearance certificates.
  • Nigeria: The Federal Inland Revenue Service issued a notice requesting all “dormant companies” to “regularise” their outstanding returns by 30 June 2020.

Read TaxNewsFlash-Africa

Asia Pacific

  • Kazakhstan: Draft legislation concerning digital technologies is intended to create a legal framework for the regulation of new digital technologies, including blockchain technologies, robotics, big data analyses, and video monitoring systems.
  • Oman: Guidance on “tax card” provisions will be effective from 1 July 2020. A tax card is required to enter into contracts and engage in certain activities in Oman.
  • Thailand: A notice provides guidelines on the requirements for applications to adopt a currency other than Thai Baht as a functional currency for income tax purposes.
  • India: The Authority for Advance Rulings rejected an application for a “nil” withholding certificate, finding an entire arrangement relating to a sale of shares of a company was designed prima facie to avoid tax in India and that a real intention behind the structured transaction was to invoke the benefits of the India-Mauritius tax treaty.
  • India:  The Central Board of Direct Taxes amended the income tax return forms for Assessment Year 2020-21. Due to the coronavirus (COVID-19) pandemic, various due dates have been extended and therefore a separate schedule is provided to declare investments, deposits, and payments made between 1 April 2020 and 1 June 2020.
  • India: A tribunal addressed the set-off of carried-forward losses transferred from a demerged company to the resulting company. The tribunal held that the resulting company is eligible to apply the carried-forward losses by filing an amended return.

Read TaxNewsFlash-Asia Pacific

FATCA / IGA / CRS

  • France: Updated FATCA and common reporting standard (CRS) information was provided for reporting financial institutions.
  • Taiwan: The tax authority issued an updated XML schema user guide (V1.5) for the financial institution information declaration system under the CRS regime.
  • UAE: Between 1 June and 30 June 2020, the Dubai International Financial Centre (DIFC) portal is open for FATCA and CRS reporting for the 2019 reportable year.

Read TaxNewsFlash-FATCA / IGA / CRS

United States

COVID-19-related developments in the United States include:

  • Notice 2020-46 provides cash payments that an employer makes to section 170(c) organizations in exchange for vacation, sick or personal leave that employees elect to forgo will not be treated as wages (or compensation) to the employees (or otherwise be included in the gross income of the employees) for payments made to eligible organizations.

Other developments this week include the following.

  • Rev. Proc. 2020-16 concerns empowerment zone extension procedures.
  • Proposed regulations implement 2017 tax law changes to the like-kind exchange rules of section 1031, and add a definition of real property reflecting the 2017 tax law measures limiting the like-kind exchange rules to exchanges of real property, and provide a rule addressing a taxpayer’s receipt of personal property that is incidental to real property received in the exchange.
  • OMB’s Office of Information and Regulatory Affairs (OIRA) received for review proposed regulations concerning consolidated net operating losses (NOLs).
  • Proposed regulations are intended to clarify the definition of a “qualifying relative” for purposes of various Code provisions for tax years 2018 through 2025.
  • Proposed regulations under section 213 concern the tax treatment of amounts paid for certain medical care arrangements—including direct primary care arrangements, health care sharing ministries, and certain government-sponsored health care programs.
  • Notice 2020-44 announces that the dollar amount to be used for purposes of determining the health care fee (excise tax) imposed by sections 4375 and 4376 for policy years and plan years that end on or after 1 October 2019 and before 1 October 2020, is $2.54.
  • A KPMG report examines the extension of tax credit timelines for renewable energy projects.
  • The Arkansas Department of Finance and Administration determined that a taxpayer/contractor’s purchases made on behalf of a government-owned hospital for use in a construction project were exempt from gross receipts and use tax because the taxpayer was the agent of the government hospital.
  • Louisiana will begin as of 1 July 2020 enforcing the sales and use tax economic nexus thresholds (over $100,000 of sales or 200 transactions). In addition, pending legislation would require marketplace facilitators to collect and remit tax on “facilitated sales,” and also would be effective 1 July 2020.
  • Missouri’s Supreme Court held that a professional football team was not liable for sales and use tax on certain items purchased during renovations to a stadium because the football team did not provide valuable consideration in exchange for the items and therefore had not acquired ownership of the items. 
  • A Tennessee appeals court held that a statute that prohibited an affiliated group of taxpayers from computing their excise tax in a consolidated manner was not unconstitutional.

Read TaxNewsFlash-United States

Indirect Tax

  • Kazakhstan: Draft legislation concerning digital technologies is intended to create a legal framework for the regulation of new digital technologies, including blockchain technologies, robotics, big data analyses, and video monitoring systems.
  • Philippines: There is an exemption from value added tax (VAT), excise tax, and other fees for certain imported health care equipment and supplies.
  • Germany: The VAT “standard” rate is temporary reduced for the period from 1 July 2020 through 31 December 2020 to 16% (from 19%); and the VAT “reduced rate” is reduced to 5% (from 7%).
  • Poland: The Advocate General of the CJEU delivered an opinion finding that the Polish rules on bad-debt relief for VAT purposes are not compatible with EU law.
  • Italy: Guidance clarifies the reporting obligations for remote (or distance) sales.
  • United States: In Arkansas, a taxpayer/contractor’s purchases made on behalf of a government-owned hospital for use in a construction project were exempt from gross receipts and use tax.
  • United States: Louisiana will begin to apply sales and use tax economic nexus thresholds (over $100,000 of sales or 200 transactions), effective 1 July 2020.
  • United States: Missouri’s Supreme Court held that a professional football team was not liable for sales and use tax on certain items purchased during renovations to a stadium because the football team did not provide valuable consideration in exchange for the items and therefore had not acquired ownership of the items. 
  • United States: A Tennessee appeals court held that a statute that prohibited an affiliated group of taxpayers from computing their excise tax in a consolidated manner was not unconstitutional.

Read TaxNewsFlash-Indirect Tax

© 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.


For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.

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