KPMG’s Week in Tax: 9 - 13 May 2022

Recent tax developments from around the globe for the week of 9 - 13 May 2022

Recent tax developments from around the globe for the week of 9 - 13 May 2022

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

Europe

  • Switzerland: The Swiss value added tax (VAT) treatment of tokenized assets must be analyzed and classified on a case-by-case basis.
  • EU: The European Commission proposed a debt-equity bias reduction allowance to help businesses access financing and become more resilient. The measure would introduce an allowance that will grant to equity the same tax treatment as debt. 
  • Spain: Law 7/2022 includes a tax imposed on landfill, incineration, and co-incineration of waste.
  • Belgium: The deadline for filing the VAT return for September/Q3 2022 is extended from 20 October 2022 to 25 October 2022. However, if the VAT return contains a refundable VAT credit, the deadline for filing the VAT return is 24 October 2022. The VAT payment deadline remains 20 October 2022.
  • Czech Republic: The government is proposing an amendment to change the beneficial owner definition less than a year since the new law on the registration of beneficial owners became effective.
  • Czech Republic: To mitigate the effects of the energy crisis on fuel prices, the government has proposed temporarily reducing the excise duties on diesel oil and unleaded petrol by CZK 1.50 per liter from 1 June to 30 September 2022.
  • Czech Republic: The VAT law does not offer any detailed guidance on the correct application of VAT to fuel cards. The VAT treatment of these transactions has always been based on general principles and on interpretations of international case law. Recently, the European Commission's VAT expert group has commented on this topic.
  • Czech Republic: The Supreme Administrative Court held unlawful the tax administrator’s reduction of the interest rate on a long-term retained VAT deduction. The court found that taxpayers are entitled to interest at a rate 12 percentage points higher than the one applied by the tax administrator.
  • Poland: Certain relief provisions will remain effective during the state of pandemic threat, including (1) the mandatory disclosure requirement deadlines for domestic arrangements will remain suspended, and (2) the deadline for notification about payments to accounts outside the so-called whitelist of VAT taxpayers will remain extended from 7 to 14 days.
  • Greece: The obligation to submit annual customers-suppliers lists has been replaced with the requirement to report, in the MyData platform no later than 27 May 2022, data related to sales documents, self-billings, and proof of expenditures.

Read TaxNewsFlash-Europe

Africa

  • Nigeria: Companies that purchased qualifying capital expenditure worth ₦500,000 and above during the 2016 and 2021 years of assessment need to submit certificates issued by the Industrial Inspectorate Division (IID) of the Federal Ministry of Industry, Trade and Investment to the tax office where their respective tax file is domiciled. The deadline for compliance by affected companies is 31 October 2022.

Read TaxNewsFlash-Africa

Americas

  • Mexico: Taxpayers will have to comply with all the requirements set out in the electronic invoices (CFDI) filling instructions as of October 2022.
  • Bolivia: The deadline related to certain VAT requirements for the month of April 2022 was extended through 12 May 2022.
  • Canada: Bill C-8, which implements some of the corporate income tax measures announced in the 2021 Federal Fall Economic Update, passed its third reading in the House of Commons.
  • Canada: Nova Scotia will no longer implement a non-resident property tax, as proposed in the province’s 2022 budget.
  • Canada: The 1% prescribed interest rate for family income-splitting loans rises to 2% on 1 July 2022.
  • Costa Rica: Legislation to amend the free trade zone system in Costa Rica provides additional tax incentives intended to attract investments to locations outside the “greater metropolitan area.”
  • Mexico: The third resolution of modifications to the miscellaneous tax resolution 2022 adds a rule relieving entities that pay individuals for agricultural, livestock, forestry or fishing activities of the obligation to withhold 1.25% for income tax, provided that the income received by said individuals is exempt.

Read TaxNewsFlash-Americas

Asia Pacific

  • Australia: The Northern Territory government’s budget for 2022-2023 includes measures concerning a stamp duty exemption; property activation levy; and the indexation of revenue units, penalty units, and monetary units.
  • India: The Gujarat High Court held that with regard to a contract for the purchase of land and the construction of a residence on that land, a deemed one-third deduction from the total amount of consideration under the contract for the value of land was contrary to the goods and services tax (GST) legislation.
  • India: The Delhi Bench of the Income-tax Appellate Tribunal held that an Indian entity did not constitute a fixed place permanent establishment of the taxpayer in India under the India-Singapore income tax treaty because the sales effected by the Indian entity were on its own independent status.
  • Singapore: The Monetary Authority of Singapore has implemented changes to two tax incentive regimes commonly used to establish family office structures in Singapore.
  • Vietnam: The General Department of Taxation issued guidance requesting provincial and municipal tax authorities to focus on tax audit and inspection of several high-risk industries and areas, including invoices, tax refunds, e-commerce, and transfer pricing.
  • Malaysia: Updated tax audit frameworks concern (1) voluntary disclosure and (2) tax penalty rates and guidelines.

Read TaxNewsFlash-Asia Pacific

Transfer Pricing

  • Czech Republic: The Supreme Administrative Court held that tax administrators may assess additional tax based on overall profitability not just for related-party transactions, but also for transactions with unrelated parties.
  • Israel: The Tel Aviv district court held for the taxpayer in a decision concerning claims of business restructuring and a deemed transfer of business functions, assets, and risks (FAR).
  • Switzerland: The government reported trends in transfer pricing controversy in Switzerland and the effects of the coronavirus (COVID-19) on such disputes.

Read TaxNewsFlash-Transfer Pricing

United States

  • The U.S. Court of Appeals for the Ninth Circuit reversed the Tax Court’s grant of summary judgment in favor of the government, in a case involving whether a taxpayer should be treated as filing its tax return when the IRS informs the taxpayer that its tax return is missing, and the taxpayer responds by giving the IRS the tax return in the manner requested.
  • Taxpayers in New Mexico affected by April 2022 wildfires and straight-line winds have until 31 August 2022 to file various individual and business tax returns and to make tax payments.

State and local tax

  • California: The Office of Tax Appeals ruled that a taxpayer was not entitled to a refund of franchise tax as a result of including treasury function receipts and certain vendor allowances in its sales factor for the tax years at issue.
  • Colorado: Retailers in Colorado will need to begin collecting on 1 July 2022 a new retail delivery fee on electric motor vehicle registrations, purchases of gas and diesel, passenger ride services, and short-term vehicle rentals.
  • New York: The state tax authority issued revised draft Article 9-A business corporation franchise tax regulations. Part 1 of the draft regulations adopts certain aspects of the Multistate Tax Commission’s statement on Public Law 86-272, which was recently revised to include certain activities that, if conducted by a business over the internet, would cause the loss of Public Law 86-272 protection. Comments on the draft regulations are due 30 June 2022.
  • New York: A state appeals court recently issued a decision addressing “who” is a securities broker’s “customer” for purposes of applying the state’s corporate tax receipts factor sourcing rules. 

Read TaxNewsFlash-United States

Trade & Customs

  • The U.S. Department of Commerce announced that the United States will be temporarily suspending Section 232 tariffs on Ukrainian steel for one year. 
  • The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce released a final rule expanding existing sanctions against Russia in response to Russia’s ongoing aggression against Ukraine.
  • The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued—in response to Russia’s invasion of Ukraine—Russia-related general licenses, determinations pursuant to executive orders, new “frequently asked questions” (FAQs), and an updated list of specially designated national (SDN list).

Read TradeNewsFlash-Trade & Customs

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

 

 

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