KPMG’s Week in Tax: 17 - 21 January 2022

Recent tax developments from around the globe for the week of 17 - 21 January 2022

Recent tax developments from around the globe for the week of 17 - 21 January 2022

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

Transfer Pricing

  • Montenegro: Tax amendments include a new definition of related parties, an extension of the list of methods used for assessment of prices in line with the arm’s length principle, and transfer pricing compliance guidelines.
  • OECD: Updated transfer pricing guidelines released, incorporating guidance since the 2017 edition.
  • Poland: The Polish Supreme Administrative Court issued a decision that the head of the National Revenue Information Service cannot refuse to issue an individual ruling on whether an entrepreneur may deduct the price paid to a related entity under restructuring proceedings on the basis that the ruling could only be provided via an advance pricing agreement (APA).

Read TaxNewsFlash-Transfer Pricing

FATCA / IGA / CRS

  • United States: Responsible officer certifications are due by 1 July 2022 for the FATCA certification period ending 31 December 2021.
  • Germany: Updated information concerning missing self-certifications under the common reporting standard (CRS) regime.
  • Singapore: A user guide to facilitate viewing or updating a financial institution’s automatic exchange of information (AEOI) profile in the myTax portal.

Read TaxNewsFlash-FATCA / IGA / CRS

Africa

  • South Africa: A regulation specifies the details that need to be included on tax invoices issued by VAT-registered electronic services providers. The requirements under the new regulation are more comprehensive than under the previously applicable rules.
  • Mauritius: The “core income generating activity” (CIGA) requirement will only apply when global business companies are claiming the 80% tax partial exemption on certain qualifying income. Global business companies that are not claiming the partial exemption will not be required to meet the CIGA requirement.

Read TaxNewsFlash-Africa

Americas

  • Canada: The Department of Finance has provided additional details on a proposed annual 1% tax to be imposed on the value of “underused” or vacant homes owned by non-resident non-Canadians.
  • Canada: Businesses that received interest-free loans under the Canada emergency business account program now have an additional year to repay these loans to qualify for partial loan forgiveness. The repayment deadline for eligible borrowers in good standing is extended to 31 December 2023 (from 31 December 2022).
  • Canada: Trusts preparing to meet enhanced beneficial ownership reporting requirements need to continue filing their returns as usual for now. The Canada Revenue Authority (CRA) clarified that affected trusts will not have to meet the proposed additional reporting and filing requirements until the government officially passes legislation to enact these changes.
  • Costa Rica: Updated income tax brackets—effective 1 January 2022—for salary, profits, and tax credits.
  • Mexico: The tax administration published a list of the 129 foreign providers of digital services that are registered for tax purposes in Mexico as of 31 December 2021. With the most recent report, seven new entities were added to the list.

Read TaxNewsFlash-Americas

Asia Pacific

  • Cambodia: Implementation of the value added tax (VAT) on electronic commerce (e-commerce) transactions has been delayed until 31 March 2022.
  • Kazakhstan: The president has signed legislation to amend the tax law. The majority of the amendments are effective as of 1 January 2022 and concern terminology, tax administration, tax liabilities, VAT administration, and the investment commitment agreement.
  • Hong Kong: A new round of relief measures in response to the coronavirus (COVID-19) pandemic support businesses and individuals.
  • Japan: Guidance concerning the retroactive change in the treatment of income from the settlement of cross-border derivative transactions.
  • Taiwan: The Ministry of Finance drafted amendments regarding the Taiwan tax registration rules for companies selling goods and services through online platforms, apps, or other electronic means.
  • Vietnam: Guidance concerning the 30% corporate income tax reduction for small and medium enterprises for 2020 and 2021.

Read TaxNewsFlash-Asia Pacific

Europe

  • France: The French tax authorities incorporated in their official guidelines a decision of the Court of Justice of the European Union (CJEU) that foreign head offices providing services to French branches are subject to VAT.
  • Montenegro: Parliament approved a set of tax amendments that extends the scope of a reduced value added tax (VAT) rate, introduces progressive taxation of corporate profits, and introduces new transfer pricing rules. There are also amendments to the individual income tax and labor laws.
  • Albania: Legislation effective at the beginning of 2022 includes changes to electronic invoicing, immovable property, individual income tax on salaries, VAT, national taxes, and the excise law.
  • Ireland: The employment wage subsidy scheme—a program intended to provide relief from the economic consequences of the COVID-19 pandemic—is extended to 30 April 2022 (from 31 December 2021).
  • Poland: The deadline for submitting real estate tax returns is 31 January 2022.
  • Switzerland: The Swiss Federal Council communicated how Pillar Two (global minimum taxation of 15%) agreed by the OECD and G20 member states is to be implemented in Switzerland. In general, it is expected that the Swiss public will vote on a constitutional amendment in June 2023, providing the basis for an implementation beginning in 2024.
  • Belgium: Beginning for income year 2022, all amounts of “costs proper to the employer” will need to be reported on the annual individual salary forms 281.10 and 281.20.

Read TaxNewsFlash-Europe

United States

  • Rev. Proc. 2022-13 provides information about (1) when and how the IRS will issue a notice of employment tax determination under section 7436, and (2) how taxpayers petition for Tax Court review of the determinations under section 7436.
  • Notice 2022-6 provides guidance on whether a series of payments from an individual account under a qualified retirement plan is considered a series of substantially equal periodic payments within the meaning of section 72(t)(2)(A)(iv).
  • To avoid penalties, employers must file Forms W-2 and other wage statements by 31 January 2022. Forms 1099-MISC, Miscellaneous Information, and Forms 1099-NEC, Nonemployee Compensation, are also due to taxpayers by 31 January 2022.
  • Taxpayers in Tennessee that were affected by December 2021 storms, straight-line winds, and tornadoes now have until 16 May 2022 to file individual and business tax returns and to make certain tax payments.

State and local tax

  • Florida: The Department of Revenue issued information on the automatic refunds Florida corporate income/franchise tax taxpayers will receive this spring. The automatic refunds are associated with tax years beginning on or after 1 April 2019 and on or before 31 March 2020. 
  • Massachusetts: The Appellate Tax Board concluded that a company that developed computer software was a manufacturing corporation eligible for a local property tax exemption and entitled to use single-sales factor apportionment.
  • Tennessee: The Department of Revenue issued a sales tax notice addressing the repeal of its drop shipment rule. After the repeal of the drop shipment rule, an out-of-state dealer (including an out-of-state marketplace seller) may purchase products for resale that are drop shipped from a Tennessee dealer to the Tennessee dealer’s customer by providing the in-state supplier a resale certificate by another state or a fully completed streamlined sales and use tax agreement (SSUTA) exemption certificate including the sales tax ID number issued by another state.
  • Virginia: The Department of Taxation addressed whether a credit for taxes paid to another state may be claimed by owners of pass-through entities that elect to be taxed at the entity-level in Maryland. The Commissioner concluded that Virginia resident owners of an electing pass-through entity (other than an S corporation) are not eligible to claim the credit for taxes paid to another state on their individual income tax returns.

Read TaxNewsFlash-United States

The items described above are also reported as editions of TaxNewsFlash:

 

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