KPMG’s Week in Tax: 21 - 25 March 2022

Recent tax developments from around the globe for the week of 21 - 25 March 2022

Recent tax developments from around the globe for the week of 21 - 25 March 2022

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

Transfer Pricing

  • Mexico: New transfer pricing regulations include significant changes with regard to certain technical matters for taxpayers to consider when conducting a transfer pricing analysis, but also concern procedural elements that taxpayers and the tax authorities alike need to take into account during a tax examination or as part of an advance pricing agreement (APA), a mutual agreement procedure (MAP) request or an administrative or litigation procedure.
  • Thailand: The Thai Revenue Department issued a new template and explanation of rules regarding the transfer pricing disclosure form for accounting year 2021. One of the new explanations regarding the transfer pricing disclosure form is intended to clarify the definition of “related party.”

Read TaxNewsFlash-Transfer Pricing


  • Channel Islands: The government of Jersey issued updated versions of FATCA and common reporting standard (CRS) practical guidance.
  • South Africa: Platforms for third-party data annual submissions—used for purposes of the automatic exchange of financial information (AEOI)—are now open for the period 1 March 2021 through 28 February 2022.
  • South Africa: Guidance clarifies the application of certain codes provided for the taxpayer identification number (TIN) data fields for U.S. reportable accounts under the FATCA Intergovernmental Agreement (IGA) between the United States and other Model 1 jurisdictions.
  • OECD: A public consultation document concerns a new global tax transparency framework to provide for the reporting and exchange of information with respect to crypto-assets, as well as proposed amendments to the CRS for the automatic exchange of financial account information among countries.

Read TaxNewsFlash-FATCA / IGA / CRS

Trade & Customs

  • The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) designated “key enablers” of Russia’s invasion of Ukraine for economic sanctions. Treasury also issued new guidance on transactions with Russia’s central bank involving gold.
  • The Office of the U.S. Trade Representative (USTR) announced its determination to reinstate certain previously granted and extended product exclusions in the Section 301 investigation of imports from China. The reinstated product exclusions will apply as of 1 October 2021 and extend through 31 December 2022.
  • The United States will replace the existing 25% tariff on UK steel products and 10% tariff on UK aluminum products under Section 232 with a tariff-rate quota (TRQ), effective 1 June 2022.
  • The U.S. Department of State released an interim final rule amending the International Traffic in Arms Regulations (ITAR) to better organize the purposes and definitions of the regulations.
  • The EU Council of Ministers for Economic Affairs and Finance (ECOFIN) agreed to adopt an adjusted version of the European Commission's proposal for a carbon-border adjustment mechanism. One measure would introduce a new certification system for imports of certain goods from countries outside the EU in an effort to prevent the production of carbon dioxide-intensive products from being relocated to countries with less stringent climate regulations.

Read TradeNewsFlash-Trade & Customs


  • UK: The “Spring Statement 2022” was light on details of a new tax plan but did offer some clues as to the direction of future corporate tax changes.
  • Poland-Netherlands: The ratification processes regarding a Protocol amending the income tax treaty between Poland and the Netherlands have been completed, and the Protocol is set to enter into force 30 April 2022 and apply to tax years, tax periods, and taxable events occurring from 1 January 2023.
  • Poland: The deadline relating to corporate income tax for 2021 has been extended to 30 June 2022 (for all corporate income taxpayers). The deadline relating to corporate income tax for 2021 has been extended to 30 June 2022 (for taxpayers holding rights in real estate companies with a tax or financial year ending during the period from 31 December 2021 through 31 May 2022).
  • Belgium: The tax authorities published a circular concerning a temporary tolerance in the context of the coronavirus (COVID-19) pandemic regarding the value added tax (VAT) deductibility of mixed-use cars (i.e., cars used for personal and business purposes). 
  • Serbia: The Ministry of Finance issued guidance concerning the corporate income tax implications of IFRS 9.
  • UK: HMRC published guidance on the basis period reforms—for individuals, partnerships, trusts, and others subject to income tax on trading income.
  • UK: New regulations are designed to prevent tax mismatches arising where derivatives are used to hedge currency risk on anticipated future share transactions.
  • UK: The qualifying asset holding company regime is set to launch on 1 April 2022.
  • UK: The First-tier Tribunal decided that VAT incurred in selling shares may be recoverable if the proceeds will be used to support continuing taxable business.

Read TaxNewsFlash-Europe


  • Zambia: The first quarter provisional income tax return for the 2022 tax charge year is due on 31 March 2022, and the provisional income tax payment is due on 10 April 2022. Late-return, late-payment, and under-estimation penalties and interest may apply.
  • Namibia: There are tax-related proposals in the budget for 2022-2023. However, there are no proposed amendments to the corporate income tax rate.
  • Nigeria: The Tax Appeal Tribunal (Lagos) held that the taxpayer’s partial transfer of interest in an oil prospecting license constituted a disposal of a chargeable asset subject to capital gains tax—and was not a gain from petroleum operations pursuant to a provision of the Petroleum Profits Tax (PPT) Act.

Read TaxNewsFlash-Africa


  • Brazil: A decision by a tax appellate court—addressing the deductibility of payments of bonuses and profit sharing to managers and administrators—reaffirms that, in order to apply a prohibition as contained in the then-applicable rules that provided for the non-deductibility of such payments to directors, the burden rests with the tax authority to demonstrate that there was no existing relationship inherent to an employment relationship (that is, subordination).
  • Brazil: Changes to rates of tax on financial transactions (IOF) are part of the process of Brazil's accession to the capital liberalization regime of the Organisation for Economic Cooperation and Development (OECD).
  • Canada: The 2022 provincial budget for Saskatchewan does not include any new changes to the corporate or individual tax rates. Tax-related proposals would (1) retroactively increase the tax credit rate for the Saskatchewan value-added agricultural incentive depending on the level of investment, and (2) add provincial sales tax to admissions and entertainment charges.
  • Canada: The 2022 provincial budget for New Brunswick does not include any new changes to the corporate or individual (personal) tax rates. Tax-related proposals would (1) increase the basic personal amount effective for the 2022 tax year, and (2) decrease certain property tax rates over a three-year period.
  • Costa Rica: Guidance provided by resolution RES-DGA-02-2022 concerns customs inspection procedures.
  • Costa Rica: Guidance establishes the rules regarding one type of tax being offset by amounts of another and different type of tax.

Read TaxNewsFlash-Americas

Asia Pacific

  • Philippines: The Bureau of Internal Revenue (BIR) issued guidance to reiterate the relevant responsibilities of the authorized agent banks (AABs) pertaining to the acceptance of 2021 annual income tax returns and payments.
  • Vietnam: The General Department of Customs issued guidance regarding the conditions for customs inspection and supervision for export processing enterprises.
  • India: A tribunal held that payments for diamond testing and certification services provided by a U.S. company to the taxpayer are not taxable as “fees for technical services” under the India-United States income tax treaty.
  • India: The government reviewed the existing foreign direct-investment policy for permitting foreign investment in an IPO-bound life insurance corporation. Accordingly, amendments have been made under the consolidated foreign direct-investment policy circular of 2020.
  • Indonesia: Guidance on the application of Indonesia’s controlled foreign country (CFC) rule relates to the coordination of the CFC rule with the taxation of onshore and offshore dividends.
  • Australia: The Board of Taxation has been tasked with reviewing an appropriate policy framework for the taxation of digital assets and transactions in Australia. The Board’s review is to be completed by 31 December 2022.
  • Australia: Treasury released for consultation exposure draft legislation that proposes to introduce a new digital games tax offset. The consultation submission closing date is 18 April 2022.

Read TaxNewsFlash-Asia Pacific

United States

  • A federal district court in Tennessee held that Notice 2016-66 (concerning microcaptive insurance transactions) was invalid because the IRS did not comply with the notice-and-comment requirements set forth in the Administrative Procedure Act and because the IRS acted arbitrarily and capriciously in issuing the notice.
  • Rev. Rul. 2022-7 concludes that all recipients of returns or return information pursuant to section 6103(c), including government employees, are subject to the disclosure restrictions of section 6103(a). Thus, government employees who receive returns or return information pursuant to disclosures under section 6103(c)—like all designees who receive returns or return information pursuant to taxpayer consent—are subject to the disclosure restrictions of section 6103(a).
  • The U.S. Tax Court released a memorandum opinion concluding that the “initial determination” of penalties was appropriately and timely made—that is, after the examining agent secured approval from her IRS supervisor.
  • The IRS Large Business and International (LB&I) division released a “practice unit” concerning penalties for erroneous claims for refund or credit.

State and local tax

  • California: The Office of Tax Appeals (OTA) addressed whether to accelerate a taxpayer’s installment gain. The taxpayer argued that although the S corporation dissolved, the business continued its California operations as a C corporation and, thus, would not be subject to accelerated reporting. Agreeing with the Franchise Tax Board, the OTA noted that when an election under IRC section 338(h)(10) is made, a corporation is treated as if it sold its assets, liquidated, and ceased to exist.  As a result, the taxpayer also ceased to exist for purposes of the accelerated future payment requirement under California law. 
  • Ohio: The state’s Supreme Court held that sales tax applies to transactions that involve automatic data processing, electronic information services, or computer services when the true object of the transaction is receiving such services.
  • New York State: The Tax Appeals Tribunal reversed a previous determination of the New York Division of Tax Appeals, and doing so, concluded that a taxpayer’s purchase of a one-half interest in a Picasso painting was exempt from sales tax as a purchase for resale.

Read TaxNewsFlash-United States

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



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