KPMG’s Week in Tax: 23 - 27 May 2022

• OECD: Comments received on the regulated financial services exclusion under Amount A of Pillar One were released.
• Hong Kong: The Inland Revenue Department indicated that it will conduct regular desk-based reviews and transfer pricing audits to ensure taxpayers’ compliance with the new transfer pricing rules and documentation requirements.
• EU: There have been no further discussions of compromise text for an EU minimum tax directive.
• Australia: The Labor Party—after winning the 2022 federal election—may introduce country-by-country (CbC) reporting measures.

Read TaxNewsFlash-Transfer Pricing

• Hong Kong: The Inland Revenue Department’s views on profits tax, transfer pricing, and income tax treaties were included in the minutes of the 2021 annual meeting between the Hong Kong Institute of Certified Public Accountants and the Inland Revenue Department.
• Vietnam: The government issued regulatory guidance concerning investment in vocational education, foreign loans, and public health policies.
• Thailand: The “customs one stop service”—a voluntary disclosure program—has been extended for five years (from 1 October 2021 through 30 September 2026). 
• Thailand: The Board of Investment announced a three-year corporate income tax exemption for 50% of the investment capital (excluding cost of land and working capital) invested in implementing certain digital technologies.
• Singapore: A new e-tax guide provides details on the income tax treatment when trading stock held by businesses is appropriated for non-trade or capital purposes and when non-trade or capital assets are converted to trading stock.
• Australia: Undervaluation of imported goods—including a failure to disclose post-import adjustments to the price—may result in penalties.
• Australia: The stamp duty act in New South Wales received Royal Assent.
• Australia: Tax measures targeting multinational enterprises (MNEs) are expected to be introduced or modified by the Labor Party after winning the 2022 federal election.
• India: A tribunal held that the beneficial ownership provisions of the India-Mauritius income tax treaty do not necessarily apply to the capital gains article of the treaty.
• India: The Supreme Court confirmed the decision of the Gujarat High Court, which held that no tax is payable under IGST Act, 2017 by the Indian importer on reverse charge on ocean freight paid by foreign seller to a foreign shipping line.
• UAE: The application of voluntary disclosure penalties has changed under the revised tax-related penalty regime.

Read TaxNewsFlash-Asia Pacific

• EU: There have been no further discussions of compromise text for an EU minimum tax directive.
• Netherlands: Proposed tax measures contained in the 2022 Spring Memorandum concern the step-up corporate income tax bracket, tax brackets in Box 2, general tax credit, Box 3 tax-free amount, and general real estate transfer tax rate.
• Netherlands: The new Dutch policy statement on insurance premium tax (IPT) contains a number of changes, the most notable of which concern the transport exemption.
• Netherlands: Supreme Court decisions related to “Box 3” (the wealth tax regime) concern ex officio reduction for non-litigants, and the opportunity to bring legal proceedings after a decision on restoration of rights.
• Denmark: Proposed legislation would introduce interest surcharges for tax corrections, including for ​​value added tax (VAT).
• Ireland: Support measures for Irish retailers introduced in response to the COVID-19 pandemic are coming to an end.
• Poland: VAT developments concern the national e-invoicing system, contractual compensation, and VAT grouping provisions.

Read TaxNewsFlash-Europe

• Nigeria: A revised regulation sets out the procedures to be adopted by pension fund operators for the administration of retirement and “terminal” benefits under the contributory pension scheme.

Read TaxNewsFlash-Africa

• Bolivia: The tax authority issued guidance to modify certain provisions of guidance issued in 2020 regarding requirements for registration in the national taxpayer registry. 
• Costa Rica: Guidance concerns the temporary suspension of deadlines for procedures and matters before the tax administration—guidance offered as a response to cyber-attacks that were made against the computer systems of the tax administration.

Read TaxNewsFlash-Americas

• Taiwan: The common reporting standard (CRS) reporting deadline for the 2021 reporting period was extended to 1 August 2022 (from 30 June 2022).
• Germany: The production environment for the transmission of FATCA data via the electronic mass data interface and the federal central tax office (BZSt) online portal is now available for submission for the 2021 reporting period.

Read TaxNewsFlash-FATCA / IGA / CRS

• The IRS released tax collection data for fiscal year 2021. More than 261 million tax returns were processed and approximately $4.1 trillion in federal taxes was collected during fiscal year 2021.
• A KPMG report provides details about backup withholding notices CP2100 and CP2100A and what taxpayers need to do if they receive one.

State and local tax

• Colorado: The governor signed legislation that revises the state’s pass-through entity tax election to allow an S corporation or partnership to elect to pay tax at the entity level retroactively to tax years beginning on or after 1 January 2018.
• Tennessee: The state tax authority issued guidance addressing a new business tax wholesaler/retailer certificate available to taxpayers beginning 1 January 2023.
• Washington State: A tax review officer concluded that a taxpayer was subject to business and occupation (B&O) tax at the service rate for amounts received as damages when customers rented and then caused damage to the taxpayer’s RVs.

Read TaxNewsFlash-United States

• The Bureau of Industry and Security (BIS) of the U.S. Commerce Department released a final rule that finalizes changes to a new license-exception Authorized Cybersecurity Exports (ACE) regime and corresponding changes in the definition section of the Export Administration Regulations (EAR). 
• BIS released an order temporarily denying for 180 days export privileges of a Russian airline.
• The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced (1) a new Russia-related general license, and (2) that it will not renew the provisions of a general license issued pursuant to the Russian Harmful Foreign Activities Sanctions Regulations.
• U.S. Customs and Border Protection released a document that summarizes—in table format—the Uyghur Forced Labor Prevention Act and forced labor “withhold release order” (WRO) enforcement mechanisms.

Read TradeNewsFlash-Trade & Customs

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

• Indirect Tax
• Taxation of the Digitalized Economy
• Tax Dispute Resolution
• Tax Developments Relating to Coronavirus (COVID-19)