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KPMG’s Week in Tax: 25 – 29 March 2019

KPMG’s Week in Tax: 25 – 29 March 2019

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

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Transfer Pricing

  • United States: The IRS released the annual report on the advance pricing and mutual agreement (APMA) program for 2018 that contains advance pricing agreement (APA) statistics for 2018.
  • India: The Central Board of Direct Taxes (CBDT) announced that representatives of the governments of India and the United States have signed an arrangement to allow for the exchange of country-by-country (CbC) reports.

Read TaxNewsFlash-Transfer Pricing

FATCA / IGA / CRS

  • OECD: An updated version of frequently asked questions (FAQs) for implementing the common reporting standard (CRS) was issued.
  • United States: The IRS has posted new “frequently asked questions” (FAQs) as guidance for foreign financial institutions under the FATCA regime.
  • United States: The IRS provided a new FAQ as guidance for qualified intermediary / withholding foreign partnership / withholding foreign trust (QI/WP/WT) entities with a certification date of 1 July 2019 and concerning when they can select the periodic review of their certification.
  • France: There is an updated version of the CRS technical guidance that provides French financial institutions with certain technical information and specifications for the transmission of CRS returns.
  • Isle of Man: A competent authority agreement was signed between the governments of the United Kingdom and Isle of Man regarding the automatic exchange of financial account information under the CRS regime.
  • Brazil: There is an update to a manual that provides guidance with respect to the FATCA and CRS regimes.
  • Ireland: The Irish Revenue Commissioners issued an update to Annex II of the Ireland-United States FATCA intergovernmental agreement (IGA).
  • Netherlands: The Dutch tax administration published a document in response to parliamentary questions about the effects of FATCA for U.S. persons who are residents of the Netherlands.
  • Russia: There are updated instructions for the online portal and for electronic reporting with respect to foreign clients under the CRS regime.
  • South Africa: The third-party data annual submissions process for the period 1 March 2018 through 28 February 2019 will open on 1 April 2019. The last date for submission of data is 31 May 2019.

Read TaxNewsFlash-FATCA / IGA / CRS

Africa

  • Africa: A KPMG indirect tax guide provides summaries of indirect tax regimes and value added tax (VAT) / goods and services tax (GST) in 20 African countries.

Read TaxNewsFlash-Africa

Americas

  • Canada: Companies need to consider steps in advance of changes to stock option rules, as announced in the federal budget.
  • Canada: The deadline for British Columbia property owners to apply for an exemption from the “speculation and vacancy tax” is 31 March 2019.
  • Canada: The 2019 Nova Scotia budget introduced a venture capital tax credit, but there were no changes to corporate or individual tax rates.
  • Costa Rica: New guidelines for electronic receipts were released—effective 1 July 2019.

Read TaxNewsFlash-Americas

Asia Pacific

  • Australia: Company directors could be personally liable for breaches of the law when workers are underpaid.
  • China: An individual income tax incentive has been introduced (effective between 1 January 2019 and 31 December 2023) for foreign “high-end talent” working in Pearl River delta cities.
  • China: Various agencies in China jointly released new policies and implementation rules under the VAT regime intended to align China’s VAT regime with OECD principles.

Read TaxNewsFlash-Asia Pacific

Europe

  • EU: The European Parliament adopted recommendations on financial crimes, tax evasion, and tax avoidance. The final report emphasizes the urgent need for tax reform to strengthen the fight against financial crimes and aggressive tax planning.
  • Switzerland: There is a new national salary calculator that was specifically developed to calculate the applicable salary level for non-Swiss nationals working in Switzerland on assignment.
  • Belgium: As a reminder, all Belgian corporate or other legal entities are required to identify and register “ultimate beneficial owners” by 30 September 2019.
  • Netherlands: The Dutch government in March 2019 launched an internet consultation, thereby affording interested parties an opportunity to respond to a draft bill that proposes a “thin cap” rule for banks and insurers. The internet consultation closes on 15 April 2019.

Read TaxNewsFlash-Europe

United States

  • Notice 2019-24 provides the adjustments to the limitation on housing expenses, under section 911, for specific locations for 2019.
  • Rev. Proc. 2019-15 provides a waiver for the time requirements of Code section 911 for individuals electing to exclude their foreign earned income who must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country.
  • The IRS issued a memorandum providing interim guidance to IRS Appeals employees on the Bipartisan Budget Act of 2018 (Pub. L. No. 115-123) partnership audit procedures. The Bipartisan Budget Act partnership audit procedures are effective for partnership tax years beginning on or after 1 January 2018. 
  • The IRS has posted new FAQs as guidance for foreign financial institutions under the FATCA regime.
  • The U.S. Treasury Department and IRS released a notice of withdrawal of proposed regulations from 2009 that concerned the recovery of stock basis in distributions of property made by a corporation to a shareholder and certain transactions treated as dividend-equivalents, as well as the determination of gain and the basis of stock or securities received in certain transactions.
  • Announcement 2019-03 provides the annual report on the advance pricing and mutual agreement (APMA) program for 2018 that contains advance pricing agreement (APA) statistics for 2018.
  • Effective 13 May 2019, only individuals with tax identification numbers may request an Employer Identification Number (EIN) as the “responsible party” on the application.
  • The FASB proposed an Accounting Standards Update (ASU) in an effort to improve income tax disclosures as part of the FASB’s disclosure framework project. The changes would affect all companies required to make disclosures about income taxes.
  • Notice 2019-22 announced the section 30D credit phase-out schedule for new qualified plug-in electric drive motor vehicles sold by General Motors, LLC.
  • The IRS announced that taxpayers who have been affected by the severe storms and flooding that took place on 12 March 2019 in Iowa may qualify for tax relief.
  • Final regulations were released as guidance on the amount of the penalty under section 6707A for a failure to include on any return or statement information required to be disclosed under section 6011 with respect to a reportable transaction.
  • Proposed regulations provide guidance for transactions when property of a C corporation becomes the property of a real estate investment trust (REIT) following certain corporate distributions of controlled corporation stock.
  • OIRA acknowledged receipt of Treasury regulatory projects with respect to provisions under the U.S. tax law (Pub. L. No. 115-97) enacted in December 2017:
    • State and local tax (SALT) credits and charitable contributions (final regulations)
    • Notice - guidance under sections 164 and 170(c)
  • The Joint Committee on Taxation (JCT) released a report of the distributional effects of the U.S. tax law and held a hearing on the law—Pub. L. No. 115-97. The focus was on the distribution of tax benefits and the law’s economic impact.
  • The governor of Kentucky signed legislation that makes numerous changes to Kentucky’s tax laws that affect businesses. Many of the changes are in response to the major tax reforms enacted in Kentucky last year.
  • More states—Nebraska, North Carolina, and North Dakota—responded to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. (state sales tax implications of remote or online sales).
  • The governor in Arkansas signed into law a bill that permits the state to liquidate unclaimed securities by allowing the unclaimed property administrator to sell a shareholder’s securities immediately after receipt.
  • Louisiana’s uniform local sales tax board (established to provide uniformity and efficiency with respect to the imposition and administration of local sales and use tax) announced a new voluntary disclosure agreement program.
  • Legislation pending in Hawaii, Oregon, and Utah would revise each state’s corporate income tax nexus standard.
  • A KPMG report provides a summary of state and local tax developments for the first quarter of 2019 in table format.

Read TaxNewsFlash-United States

Legislative Updates

  • A bipartisan bill to redesign the IRS was released by the Chairman of the U.S. House Ways and Means Committee (Richard Neal, D-MA), the Ranking Republican on the Committee (Kevin Brady, R-TX), the Chairman of the Committee’s Oversight Subcommittee (John Lewis, D-GA), and the Ranking Republican on the Oversight Subcommittee (Mike Kelly, R-PA).
  • The staff of the JCT released a presentation that provides an overview of section 163(j)—the limitation on deduction of business interest.

Read TaxNewsFlash-Legislative Updates

Trade & Customs

  • The U.S. Treasury Department, Office of Foreign Assets Control (OFAC), announced that a U.S. company and its Chinese subsidiary agreed to pay approximately $1.87 million to settle violations of the Iranian sanctions regulations.

Read TaxNewsFlash-Trade & Customs

Indirect Tax

  • Canada: The deadline for British Columbia property owners to apply for an exemption from the “speculation and vacancy tax” is 31 March 2019.
  • Costa Rica: New guidelines for electronic receipts were released—effective 1 July 2019.
  • Africa: A KPMG indirect tax guide provides summaries of indirect tax regimes and VAT / GST in 20 African countries.
  • China: Various agencies in China jointly released new policies and implementation rules under the VAT regime intended to align China’s VAT regime with OECD principles.
  • United States: The governor of Kentucky signed legislation that makes numerous changes to Kentucky’s tax laws that affect businesses.
  • United States: Louisiana’s uniform local sales tax board (established to provide uniformity and efficiency with respect to the imposition and administration of local sales and use tax) announced a new voluntary disclosure agreement program.
  • United States: More states—Nebraska, North Carolina, and North Dakota—responded to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. (state sales tax implications of remote or online sales).

Read TaxNewsFlash-Indirect Tax

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