KPMG’s Week in Tax: 4 - 8 February 2019 - KPMG Global
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KPMG’s Week in Tax: 4 - 8 February 2019

KPMG’s Week in Tax: 4 - 8 February 2019

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

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Transfer Pricing

  • Denmark: The Supreme Court of Denmark issued a taxpayer-favorable decision in a landmark transfer pricing case. The decision, a case of first impression, addresses several substantial transfer pricing matters (including transfer pricing documentation) under the Danish transfer pricing rules.

Read TaxNewsFlash-Transfer Pricing

BEPS

  • Singapore: With the deposit of the instrument of ratification of the multilateral instrument (MLI) addressing base erosion and profit shifting (BEPS), the MLI will enter into force on 1 April 2019 for Singapore’s network of income tax treaties.

Read TaxNewsFlash-BEPS

FATCA / IGA / CRS

  • Germany: The tax authority provided financial institutions and foreign service providers with information about current developments with regards to the FATCA rules in Germany (specifically concerning the notification scheme, signature procedure, and information about and testing for data transmission).

Read TaxNewsFlash-FATCA / IGA / CRS

Africa

  • Botswana:  There were no changes to the tax laws proposed in the 2019/2020 budget. Accordingly, a “tax card” from KPMG provides an overview of the current tax provisions.
  •  Nigeria: A corporate governance code based on six governance pillars and 28 principles was issued.

Read TaxNewsFlash-Africa

Americas

  • Cayman Islands: Legislation provides economic substance requirements for certain Cayman-based entities that are engaged in certain “relevant activities.” A failure to comply with the economic substance requirements can be subject to penalties and to a possible “strike off” of the Cayman entity for continued failures.
  • Colombia: The rules under the mandatory electronic shipping guide, proof of residence rules to counter additional tax, and taxation with respect to payments made abroad for the acquisition of virtual gift cards are described.
  • Mexico: A tax resolution published in the official gazette reflects various changes under Mexico’s tax law and includes measures concerning: (1) the ability to offset or apply balances of taxpayer-favorable amounts against amounts of federal tax owed; and (2) the economic stimulus program for the “northern border region.”

Read TaxNewsFlash-Americas

Asia Pacific

  • India: The state budget for Kerala includes a proposal for a “flood cess” that would apply for a two-year period. The “cess” (a term for local taxation in India) would be imposed as a percentage of supplies of goods and services and would be levied under the state’s goods and services tax (GST) law.
  • India: The Finance Minister presented the “interim union budget 2019” that includes proposals for direct tax, individual tax, and stamp tax measures.

Read TaxNewsFlash-Asia Pacific

United States

  • The U.S. Treasury Department and IRS released for publication in the Federal Register final regulations relating to the “transition tax” under section 965 as enacted by the U.S. tax law (December 2017).
  • Final regulations and proposed regulations under section 199A—the provision enacted under the December 2017 tax law that allows certain owners of sole proprietorships, partnerships, trusts, and S corporations to deduct 20% of their qualified business income—were released for publication in the Federal Register. A KPMG report examines certain notable changes that were provided in “corrected final regulations” released by the U.S. Treasury Department and IRS on 1 February 2019.
  • The U.S. Treasury Department released a quarterly list of countries that require (or may require) participation in, or cooperation with, an international boycott (within the meaning of Internal Revenue Code section 999(b)(3)). There were no changes to this list of countries from prior quarterly lists.
  • The Mississippi Department of Revenue issued guidance on the state’s treatment of certain provisions of the federal tax law known as the “Tax Cuts and Jobs Act.” Many aspects of the federal tax legislation will not affect Mississippi taxpayers because the state has its own statutory provisions for many of the changes.
  • The Missouri Administrative Hearing Commission found a professional football club was liable for approximately $1 million in Missouri sales and use tax, plus interest, related to stadium renovations.
  • A Texas appeals court affirmed a trial court’s decision that a hotel’s purchases of consumables (e.g., toilet paper, soap, lotion, shampoo, cups) did not qualify for the resale exemption from sales and use tax.
  • A Texas administrative law judge found receipts from sales of bunker fuel oil delivered to foreign-registered vessels in Texas ports and waters were Texas-sourced receipts.
  • Philadelphia’s Department of Revenue, in light of the Wayfair decision, amended the regulation that defines “doing business” in Philadelphia, Pennsylvania, for purposes of the city’s business income and receipts tax (BIRT).

Read TaxNewsFlash-United States

Exempt Organizations

  • The IRS Tax Exempt and Government Entities (TE/GE) division released its “FY 2018 Accomplishments Letter” with information about the number of compliance checks and other statistics.

Read TaxNewsFlash-Exempt Organizations

Indirect Tax

  • India: The state budget for Kerala includes a proposal for a “flood cess” that would be imposed for a two-year period as a percentage of supplies of goods and services and would be levied under the state’s goods and services tax (GST) law.
  • India: The “interim union budget 2019” includes proposals for direct tax, individual tax, and stamp tax.
  • United States: The Missouri Administrative Hearing Commission found a professional football club was liable for Missouri sales and use tax related to stadium renovations.
  • United States: A Texas appeals court affirmed that a hotel’s purchases of consumables (e.g., toilet paper, soap, lotion, shampoo, cups) did not qualify for the resale exemption from sales and use tax.
  • United States: Philadelphia’s Department of Revenue amended the standard for “doing business” in Philadelphia, Pennsylvania, for purposes of the city’s business income and receipts tax (BIRT).

Read TaxNewsFlash-Indirect Tax

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