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KPMG’s Week in Tax: 13 - 17 May 2019

KPMG’s Week in Tax: 13 - 17 May 2019

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

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Transfer Pricing

  • Italy: Large multinational entities (MNEs) that engage in direct sales in Italy may request from the Italian tax authorities a ruling with regard to whether the MNE’s activities give rise to a permanent establishment (PE) in Italy. The ruling process is intended to provide certainty with regard to the taxation of the taxpayer’s transactions in Italy.


Read TaxNewsFlash-Transfer Pricing

FATCA / IGA / CRS

  • India: The tax department issued an updated version of a “generic submission utility” for submitting statements on Form 61B under the FATCA and common reporting standard (CRS) regimes.
  • Italy: Updated instructions were released for FATCA and CRS / DAC2 returns.
  • Belgium: Guidance addresses, under the CRS regime, the treatment of persons with pending asylum applications.
  • Brazil: The tax authority in Brazil (RFB) issued an updated version of a manual with respect to the FATCA and CRS regimes.
  • South Africa: The third-party data annual submissions process for the period 1 March 2018 through 28 February 2019 opened on 1 April 2019, and the last date for the submission of data is 31 May 2019.


Read TaxNewsFlash-FATCA / IGA / CRS

Africa

  • South Africa: The first payment under the carbon tax regime has been delayed to July 2020.
  • Nigeria: The Federal Inland Revenue Service announced plans to conduct joint tax audit exercises with the tax authorities of the various Nigerian states in an attempt to improve the tax audit experience of taxpayers in Nigeria, reduce the tax audit cycle, and eliminate the incidence of multiple tax audits by various tax authorities.


Read TaxNewsFlash-Africa

Americas

  • Costa Rica: The instruments of ratification for the new income tax treaty between Costa Rica and Mexico have been exchanged, and the treaty provisions will be effective as of the first day of the January following the deposit of the instruments of ratification.


Read TaxNewsFlash-Americas

Europe

  • Austria: Tax reform legislative proposals are expected to include a reduced rate of corporate income tax, among other measures.
  • Belgium: A new “modulation” of the pharma contributions has been implemented to provide for a subsidy for certain pharmaceutical research. 
  • EU: A new system for EU Member States to exchange and process value added tax (VAT) data rapidly reflects efforts to address VAT fraud and to put in place a modern and fraud-proof VAT system.
  • Germany: The German Federal Tax Court (BFH) requested that the Court of Justice of the European Union (CJEU) clarify what details are required for an input VAT refund application and specifically what “number of the invoice” is to be designated.
  • Germany: The German Federal Ministry of Finance (BMF) issued guidance basically providing that payments received by non-resident platform operators and internet service providers for the placement of online advertising on internet pages were not subject to tax withholding.


Read TaxNewsFlash-Europe

Asia Pacific

  • New Zealand: The government intends to revise the rules for goods and services tax (GST) rules for telecommunications services from 1 October 2020. 
  • Thailand: The final version of the international business center application form was officially issued, and guidance clarifies that expatriate employees of eligible businesses must satisfy certain conditions to claim the individual income tax benefits under the international business center regime.

Read TaxNewsFlash-Asia Pacific

United States

  • KPMG has prepared a web-based index that is a tool designed to make it easy to locate developments and resources relating to the 2017 U.S. tax law, commonly referred to as the “Tax Cuts and Jobs Act” (Pub. L. No. 115-97).
  • OMB’s Office of Information and Regulatory Affairs (OIRA) received for review from the U.S. Treasury Department an “interim final rule” as guidance on dividend received deduction issues under section 245A and branch loss recapture issues under section 91; proposed regulations concerning multiple employer plans (MEPs); final and proposed regulations as guidance regarding the inclusion of global intangible low-taxed income (GILTI) by U.S. shareholders under sections 951(b) and 951A; and proposed regulations under section 4968 relating to the excise tax on college net investment income.
  • The U.S. Court of Appeals for the Tenth Circuit affirmed a decision of the U.S. Tax Court relating to the timing of deductions by a subchapter S corporation for expenses paid to employees who participate in the corporation’s employee stock ownership plan (ESOP). The Tax Court had held the taxpayers were liable for past-due taxes arising out of errors in their income tax returns caused by premature deductions for expenses paid to their corporation’s ESOP.
  • The U.S. Supreme Court held, in a five-to-four decision, that the U.S. states retain their sovereign immunity from private suits brought in courts of other states, in a case triggered by torts allegedly committed during a tax audit.
  • The Massachusetts Department of Revenue proposed amendments to a regulation that addresses the circumstances under which corporations are subject to Massachusetts corporate excise tax.
  • A new ordinance in San Francisco, California, adopts a non-refundable tax credit that can be applied against the “City Homelessness Gross Receipts Tax” equal to 10% of a person's or a combined group’s tax liability for the year.
  • States—including Colorado, Georgia, Indiana, and Kansas—have enacted legislation or issued guidance in response to the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. (state sales tax implications of remote or online sales).
  • A KPMG report examines certain key highlights of final regulations under section 987 that address combinations and separations of qualified business units (QBUs) and the recognition and deferral of foreign currency gain or loss in connection with certain QBU terminations and partnership transactions.


Read TaxNewsFlash-United States

Trade & Customs

  • United States: The Office of the United States Trade Representative (USTR) released a notice about plans for an additional customs duty of up to 25% on imports from China having a value worth $300 billion.
  • United States: U.S. Customs and Border Protection (CBP) issued a release concerning products excluded from the 25% customs duty imposed on imports from China. The product exclusions will apply as of 6 July 2019.
  • United States: The USTR released a statement regarding imports from China that are not subject to the 25% additional customs duty.
  • United States: CBP issued a reminder that the informed compliance period for the air cargo advance screening (ACAS) program ends on 11 June 2019.
  • Russia: Customs authorities in the Eurasian Economic Union are requesting documentation that imports of identified products comply with certain standards..
  • China: A circular announced increases to the tariffs on certain U.S. imports, effective 1 June 2019.


Read TaxNewsFlash-Trade & Customs

Indirect Tax

  • New Zealand: The government intends to revise the rules for goods and services tax (GST) rules for telecommunications services from 1 October 2020. 
  • South Africa: The first payment under the carbon tax regime has been delayed to July 2020.
  • EU: A new system for EU Member States to exchange and process VAT data rapidly reflects efforts to address VAT fraud and to put in place a modern and fraud-proof VAT system.
  • Germany: The CJEU has been requested to clarify what details are required for an input VAT refund application and specifically what “number of the invoice” is to be designated.
  • United States: States—including Colorado, Georgia, Indiana, and Kansas—have enacted legislation or issued guidance in response 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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