KPMG Week in Tax: 21 - 25 November 2022

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

• OECD: The mutual agreement procedure (MAP) statistics for 2021 cover 127 jurisdictions and practically all MAP cases worldwide.
• EU: A KPMG report summarizes where EU Member States are in terms of implementing the public country-by-country (CbC) reporting rules into their domestic legislation. 
• Malta:  Legislation implementing formal transfer pricing rules will be effective from 1 January 2024.

Read TaxNewsFlash-Transfer Pricing

• The U.S. Treasury Department and IRS on 18 November 2022 released proposed regulations relating to the foreign tax credit. A KPMG report provides observations and analysis.
• The U.S. Court of Appeals for the Ninth Circuit denied the taxpayer’s petition for a rehearing en banc of the Ninth Circuit’s decision affirming 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.
• Notice 2022-62 provides the “2022 required amendments list”—in general, a list of statutory and administrative changes in requirements that are first effective during the plan year in which the list is published. There are no entries listing changes in qualification requirements on the 2022 required amendments list.

State and local tax

• New York: The tax authority provided guidance on the New York City (NYC) passthrough entity tax (PTET) election. 
• Colorado: The Colorado Court of Appeals issued the following tax-related decisions:
  • The court held that Colorado’s income tax code incorporates retroactive federal changes, despite a departmental regulation to the contrary.
  • The court also held that a subsidiary was an includable corporation required to be included in the taxpayer’s Colorado unitary combined group.
• Wisconsin: A time-limited unclaimed property voluntary disclosure program is currently available for businesses, organizations, and governmental units that are not in compliance with Wisconsin’s unclaimed property laws, to voluntarily come forward to report and remit unclaimed property without late fees or penalties. The program is available from 1 February 2022 through 28 February 2023 and eligible businesses must apply to initiate participation. 
• Wyoming: The Wyoming Supreme Court held that certain roadside services provided by a vehicle towing and recovery company were not services for the “repair, alteration, or improvement of tangible personal property” and thus were not subject to the state’s excise tax.

Read TaxNewsFlash-United States

• The Office of the U.S. Trade Representative announced the determination to further extend certain product exclusions—that is, to remove Section 301 customs duties from medical-care products from China that address COVID-19—through 28 February 2023.
• U.S. Customs and Border Protection (CBP) issued a “withhold release order” on certain raw sugar and sugar-based products produced in the Dominican Republic based on information that “reasonably indicates” the use of forced labor.
• The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related guidance concerning the price cap policy for crude oil of Russian origin:
• OFAC also separately issued Russia-related general license—Authorizing certain administrative transactions prohibited by Directive 4 under Executive Order 14024.

Read TradeNewsFlash-Trade & Customs

• Botswana: Amendments to the income tax law (1) make changes to the list of corporate bodies exempt from income tax for the period 1 July 2022 to 30 June 2032, and (2) provide for increases in the thresholds of pension entitlements members are allowed to commute tax free.

Read TaxNewsFlash-Africa

• Brazil: A new law provides rules for the deduction of losses incurred in receiving credits from financial institutions and other institutions authorized to operate by the Central Bank of Brazil. The new rules do not apply to consortium administrators and payment institutions.
• Canada: The Department of Finance released draft revisions to the proposed excessive interest and financing expenses limitation (EIFEL) rules. Comments on the revised draft legislation will be accepted until 6 January 2023.

Read TaxNewsFlash-Americas

• Qatar: The Minister of Finance issued guidance providing when refunds of excise tax may be granted.
• Qatar: The Ministry of Finance issued guidance implementing tax exemptions and customs procedures for hosting the FIFA World Cup Qatar 2022.
• China: The government released tax-deferral policies for private pensions that will take effect from 1 January 2022.

Read TaxNewsFlash-Asia Pacific

• Sweden: Proposed legislation concerning cross-border sharing between EU member states is the focus of a KPMG report.
• Poland: The Lower House of the Polish Parliament (Sejm) approved amendments to the tax law that would (1) reduce the taxable base for the tax on certain financial institutions by the value of bonds guaranteed by the State Treasury, and (2) conform robotization relief provisions to EU regulations.
• Poland: The president signed the act ratifying the income tax treaty between Poland and Georgia. The treaty includes a real estate clause, a full information exchange clause, and a general anti-avoidance clause.
• Poland: The multilateral competent authority agreement (MCAA) for the automatic exchange of information on income derived through digital platforms was signed.
• Poland: The Supreme Administrative Court, Court of Justice of the European Union (CJEU), and Advocate General of the CJEU issued decisions concerning value added tax (VAT).

Read TaxNewsFlash-Europe

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)