KPMG’s Week in Tax: 6 - 10 June 2022
Recent tax developments from around the globe for the week of 6 - 10 June 2022
Recent tax developments from around the globe for the week of 6 - 10 June 2022
Tax developments or tax-related items reported this week include the following.
- OECD: New transfer pricing country profiles for Egypt, Liberia, Saudi Arabia, and Sri Lanka provide current information on key aspects of transfer pricing legislation and practice.
- Peru: Local files for FY 2021 must be submitted within a range of dates in mid-June 2022 (the exact date for filing depends on the taxpayer identification number of the Peruvian entity).
- Poland: According to the Minister of Finance, in replying to a parliamentary inquiry about the rules regarding the reporting of certain transfer pricing information, the TPR-C form may be authenticated by a qualified electronic signature, as certified by any EU state-designated entity.
FATCA / IGA / CRS
- South Africa: The South African Revenue Service (SARS) announced the closure of its third-party data annual submissions process for the 2022 reporting period, which includes submissions for the automatic exchange of financial information (AEOI)—related to the FATCA and common reporting standard (CRS) regimes.
- British Virgin Islands: The tax authority announced that the annual fee for use of the BVIFars portal will not be imposed on users beginning on 1 September 2022, as previously announced. The fee will be implemented later in 2022.
- United States: The IRS issued a reminder that responsible officer certifications are due by 1 July 2022 for the FATCA certification period ending 31 December 2021.
- Greece: A new law provides various tax incentives applicable to business restructurings and collaborations and introduces improvements to tax incentives granted by previously issued incentive laws.
- EU: As of 1 January 2023, reporting obligations will apply to EU imports of the targeted products under the carbon border adjustment mechanism regulation. Businesses will be required to report, on a quarterly basis, the embedded emissions in the imported goods (during that quarter of a calendar year).
- Romania: Changes to the tax law provide new rules on the taxation of capital gains earned through “intermediaries.”
- Netherlands: Two court decisions held—seemingly contrary to an earlier decision of 2018—that transfers of real property leased by a developer for a short term qualified as transfers of a going concern for VAT purposes.
- Poland: The Supreme Administrative Court held that the reduced default interest rate can be applied to interest on corporate income tax arrears paid voluntarily after the end of the year. The court decided that the reduced interest rate is only unavailable when taxpayers submit amended returns once they are served an audit notice or after an audit is finalized.
- Poland: The Supreme Administrative Court held that amounts expressed in foreign currency in collective corrective VAT invoices issued or received by a taxpayer must be converted—for purposes of correcting both the revenue and the cost for corporate income tax purposes—at the average National Bank of Poland (NBP) exchange rate as of the last business day preceding the date of issuance of the collective corrective invoice.
- Bahrain: The customs authority in Saudi Arabia has stopped clearing shipments from Bahrain that do not meet the Gulf Cooperation Council (GCC) country of origin rules from entering Saudi Arabia through the King Fahd Causeway, unless import duties are paid before clearance.
- China: New preferential corporate income tax policies for the Hengqin Guangdong-Macao Deep Cooperation Zone—compared with the original preferential policies—not only continue a reduced corporate income tax rate of 15% for eligible enterprises, but also add tax exemptions for overseas income from specific industries and provide for the acceleration of newly purchased fixed assets and intangible assets.
- Hong Kong: Under a proposed concessionary tax regime, profits derived by ship agents, ship managers, and ship brokers in Hong Kong would benefit from a profits tax exemption or a concessionary profits tax rate of 0% or 8.25% if the specified conditions are met.
- Philippines: The Bureau of Internal Revenue has issued guidance suspending (1) the audit and other field operations of all task forces created thru Revenue Special Orders, Operations Memoranda and other similar orders or directives; and (2) all pending letters of authority/audit notices, mission orders and submission of inventory.
- Vietnam: The following tax payments for 2022 have been deferred as part of the post-coronavirus pandemic recovery package: corporate income tax payments for the first two quarters of 2022; VAT payments (excluding import VAT); 50% of land rental payments due between 31 May 2022 and 30 November 2022; and individual (personal) income tax and VAT payments by business households and individuals conducting business.
- Australia: The Australian Taxation Office (ATO) is planning to conduct several additional consultations between June and July 2022, including a consultation in July on taxing U.S. and UK resident financial institutions under U.S. and UK tax treaties.
- Australia: Recent developments affecting the superannuation industry include several significant pieces of legislation, demographic trends, and digital and value chain disruption.
- Australia: The South Australia budget for 2022-2023 includes land tax measures.
- Nigeria: A review of the recent macroeconomic performance of Nigeria includes a discussion of tax measures in the Finance Act, 2021. The tax measures include a capital gains tax, companies income tax, tertiary education tax, and Nigeria police trust fund levy.
- Nigeria: A tax guide for 2022 provides an overview of Nigeria’s tax system and examines investment incentives available to companies and individuals in Nigeria.
- Brazil: Recent tax developments in Brazil may affect companies operating in the financial, insurance, and real estate sectors.
- Canada: Legislation in Newfoundland and Labrador—including the new “green technology” tax credit and manufacturing and processing investment tax credit—received Royal Assent.
- Canada: The Northwest Territories, Nunavut, and Yukon recently tabled their respective budgets for 2022—none of which included any proposals for changes to the corporate or individual (personal) income tax rates or any new income tax measures, although Yukon would extend its temporarily expanded business investment tax credit until the end of 2026 as part of ongoing coronavirus (COVID-19) support.
- Canada: Legislation in British Columbia that includes changes to corporate tax credits received Royal Assent.
- Mexico: The growing automation of tax compliance presents challenges and potential benefits.
- Panama: A new law—which becomes effective 1 January 2023—provides an exemption from the payment of the selective consumption tax (currently set at 5%) for electric vehicles until 31 December 2030.
- Bolivia: A bill has been presented to the legislative assembly that, if enacted, would modify the procedural rules regarding tax remittances and related penalties.
- The U.S. Court of Appeals for the Ninth Circuit affirmed the federal district court’s dismissal of an action seeking to invalidate the mandatory repatriation tax under section 965 on the grounds that it violates the Constitution’s Apportionment Clause and Fifth Amendment’s Due Process Clause.
- A KPMG report discusses tax considerations of traditional consumer and retail companies evolving into e-commerce and direct-to-consumer businesses.
State and local tax
- Arkansas: An administrative law judge (ALJ) held that a taxpayer “used” leased vehicles in Arkansas and was therefore required to include the value of the vehicles in the property factor for the tax years at issue. The ALJ concluded that the Arkansas courts would define “use” as meaning “enjoy, hold, occupy, or have in some manner the benefit thereof.”
- Massachusetts: The Department of Revenue issued guidance addressing whether a purchaser of software that was to be used in more than one state was required to issue a certificate indicating it would assume responsibility for apportioning and paying the tax to Massachusetts and the other states where the software was used at the time of purchase as required under the Commissioner’s regulation, or whether the purchaser could subsequently apportion the tax based on use and seek a refund through the general abatement process.
- Vermont: Corporate income tax changes have been enacted in Vermont that apply to tax years beginning on or after 1 January 2023.
- Nexus developments
- Oregon: A taxpayer has asked the U.S. Supreme Court to review a decision from the state’s Supreme Court holding that an out-of-state telecommunications company providing voice over internet protocol (VoIP) services to in-state customers was required to collect the state’s E-911 tax.
- Massachusetts: The Supreme Judicial court agreed to review an Appellate Tax Board decision addressing whether a taxpayer had nexus for the pre-Wayfair period under the Commonwealth’s “cookie nexus” regulation. The Board had concluded that Wayfair “leaves no doubt that” the “cookies” did not satisfy the Quill physical presence rule and that Wayfair did not apply retroactively.
- Washington State: The state Board of Tax Appeals concluded that sellers that participated in an online marketplace’s fulfillment program were required to collect and remit retail sales tax and pay retailing business and occupation (B&O) tax for the tax years at issue.
Trade & Customs
- The U.S. Court of Appeals for the Federal Circuit affirmed the trade court’s decision that a presidential proclamation (and successor proclamations) imposing a 25% tariff on imports of steel articles from various countries did not violate Section 232 of the Trade Expansion Act of 1962.
- The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) released a final rule that amends the Cuban assets control regulations to “increase support for the Cuban people.” OFAC also released new and updated “frequently asked questions” (FAQs).
- OFAC issued new and amended Russia-related FAQs.
- The U.S. president issued a proclamation announcing that solar modules and cells from Cambodia, Malaysia, Thailand, and Vietnam can be imported free of certain duties for 24 months.
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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