KPMG’s Week in Tax: 31 October - 4 November 2022
Recent tax developments from around the globe for the week of 31 October - 4 November 2022
Recent tax developments from around the globe for the week of 31 October - 4 November 2022
- Germany: The government (1) published draft legislation to implement the EU public country-by-country (CbC) reporting directive, and (2) responded to parliamentary questions in relation to the implementation of the minimum corporate tax rules under Pillar Two.
- Hungary: Draft legislation was submitted to the Hungarian National Assembly to implement the EU public CbC reporting directive.
FATCA / IGA / CRS
- Ireland: The tax authority has been increasing FATCA and common reporting standard (CRS) compliance review over the last few months to assess whether Irish entities are complying with the Irish FATCA and CRS provisions.
- British Virgin Islands: The BVI financial account reporting system (BVIFars) portal is expected to go live by the end of the first quarter of 2023.
- South Africa: Draft legislation would amend South Africa’s income tax law to align with terminology referred to in IFRS 17 Insurance Contracts (IFRS 17)—the new accounting standard for insurance contracts effective for reporting periods commencing on or after 1 January 2023.
- Nigeria: The Federal Inland Revenue Service (FIRS) intends to deploy the “Sentinal National Payment Gateway” that will provide FIRS with the ability to collect taxes on gaming transactions in real time, thereby improving tax compliance with respect to companies providing online gaming services. All Nigerian and non-resident companies offering online gaming services to Nigerian customers must connect to the gateway no later than 31 December 2022.
- Nigeria: A new law provides tax incentives for the development and operation of startups in Nigeria.
- Canada: The deadline for many employers to meet extensive obligations under the goods and services tax / harmonized sales tax (GST/HST) and Quebec sales tax (QST) pension plan rules is 31 December 2022.
- Costa Rica: The Ministry of Finance published an updated list of cross-border digital services on which value added tax (VAT) must be applied by Costa Rican banks.
- Bahrain: The National Bureau for Revenue (NBR) updated the list of goods subject to excise tax.
- New Zealand: A number of remedial goods and services tax (GST) changes were introduced to further amend the new GST invoicing rules.
- Saudi Arabia: The Minister of Finance issued Ministerial Resolution No. 13957 allowing taxpayers subject to Zakat on the basis of accounting records to apply the provisions of the Zakat regulations issued by Ministerial Resolution No. 2216 (and generally applicable only to financial years beginning before 1 January 2019), in accordance with certain specified conditions.
- Hong Kong: The Inland Revenue Department (IRD) uploaded onto its website the standard form for taxpayers to make an application for the Commissioner of Inland Revenue (CIR) on their compliance with the economic substance requirements under the foreign-sourced income exemption regime.
- Singapore: The Inland Revenue Authority of Singapore (IRAS) updated an e-tax guide on research and development (R&D) related tax measures.
- UAE: The president issued the Federal Decree-Law No. (18) of 2022 to amend certain provisions of the Federal Decree-Law No. 8 of 2022 on VAT. The amended provisions will become effective from 1 January 2023.
- Czech Republic: A revised list of non-cooperative jurisdictions for controlled foreign company (CFC) rules was published.
- Finland: A draft bill to transpose DAC7 into domestic law would require digital platform operators to provide the Finnish competent authority with information about certain users (sellers) on their platform to enable the Finnish competent authority to exchange the information with other EU Member States.
- Ireland: Finance Bill 2022 proposed minor amendments to the residential zoned land tax (RZLT) regime.
- Netherlands: The Dutch Supreme Court issued a decision on the interpretation of the term “employer” under the income tax treaty between Germany and the Netherlands—relying on a dynamic interpretation of tax treaties.
- Netherlands: Draft legislation would introduce a temporary solidarity contribution on the 2022 profits of companies engaged in crude oil, natural gas, coal and petroleum refining activities.
- Portugal: Tax proposals in the 2023 draft budget bill includes a new crypto tax regime.
- Germany: The Federal Tax Court (BFH) held that a taxpayer is entitled to deduct input VAT on “outplacement consultation” services on the basis of a primary business interest. The taxpayer secured the services to achieve a targeted reduction of staff by offering individual employees with non-cancellable and open-ended contracts support in establishing a new position (e.g., interview training).
- Poland: The Council of Ministers passed draft legislation that would extend an excise tax (duty) exemption for passenger vehicles utilizing an external source of electricity, with engine cubic capacity not exceeding 2000 cm³ (commonly referred to as plug-in electric vehicles) until 31 December 2029.
- Poland: A new draft bill aims at reducing waste from single-use plastics in the environment by stimulating demand for recycled plastics through determining the minimum amount of recycled material in new products and introducing a fee on single-use plastic packaging.
- Poland: Recent Supreme Administrative Court decisions concern debt for equity swaps and the deductibility of team-building event costs.
- Belgium: The Constitutional Court upheld the new annual tax on securities accounts—finding the tax is compatible with the principles of equality and non-discrimination—but struck down certain specific anti-abuse provisions and the retroactive application of the general anti-abuse provision.
- Spain: The Spanish Supreme Court issued a decision in a case concerning the classification of payments made in respect to the transfer of customer and operational under the income tax treaty with Germany—relying on a dynamic interpretation of tax treaties.
- Spain: The “Creation and Growth Law” extends the obligation to issue, submit and receive electronic invoices in business dealings to all traders and professionals.
- Austria: Recent tax developments concern inflation relief-related tax measures, DAC7 implementation, guidance on crypto taxation, and updated VAT guidelines.
- The IRS issued three notices asking for comments on different aspects of extensions and enhancements of energy tax benefits in H.R. 5376 (the “Inflation Reduction Act of 2022”).
- KPMG reports discuss:
- Approaching year-end considerations and possible planning opportunities for investors in cryptocurrencies
- The purpose of the combined federal state filing program (CFSFP), how to participate, and common misconceptions experienced by taxpayers
State and local tax
- Pennsylvania: The Board of Finance and Revenue denied a petition protesting the state tax authority’s application of the sourcing rules for tangible personal property (i.e., based on delivery location) to a taxpayer’s sales of digital audio books and other digital content.
- South Carolina: The state tax authority ruled that separately stated “inflation fees,” “convenience fees,” or “non-cash adjustment fees” charged by retailers in connection with the retail sale of tangible personal property, in order to recover certain operating costs, must be included in the “gross proceeds of sales” or “sales price” and are subject to sales and use tax—assuming the underlying retail transaction is subject to sales and use tax.
- Washington State: A tax review officer determined that a law firm’s receipts from providing patent procurement services must be sourced based on where the taxpayer’s clients’ general strategic planning and corporate management activities occurred (i.e., at the clients’ headquarters locations).
Trade & Customs
- U.S. Customs and Border Protection (CBP) issued a release announcing that a change in the Automated Commercial Environment (ACE) no longer requires the dairy fee or the MPF on Formula Act entries through 31 December 2022.
- The Bureau of Industry and Security (BIS) of the U.S. Commerce Department released “frequently asked questions” (FAQs) concerning the interim final rule amending the Export Administration Regulations (EAR) to implement controls on advanced computing integrated circuits, computer commodities that contain such integrated circuits, and certain semiconductor manufacturing items.
- The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) published a Russia-related FAQ concerning crude oil subject to the price cap.
- The European Commission published the most recent version of the Combined Nomenclature (CN) that will be applicable from 1 January 2023.
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)
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