KPMG Week in Tax: 23 - 27 January 2023

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

• Nigeria: The deadline for employers filing Pay-As-You-Earn (PAYE) tax returns for 2022 is 31 January 2023.

Read TaxNewsFlash-Africa

• Cambodia: The General Department of Taxation no longer accepts monthly and annual tax on income declarations submitted via the e-documents facility.
• Philippines: Revenue Memorandum Circular No. 8-2023 limits the submission of the inventory list and prescribed schedules to soft copies instead of previously requiring both hard and soft copies.
• Philippines: Health maintenance organization (HMO) plans acquired by registered export enterprises, for employees directly involved in operations of the registered project or activity and forming part of the employee’s compensation package, can be considered necessary expenses directly and exclusively used in the registered project or activity, and hence, subject to 0% VAT (rather than the normally applicable 12% VAT) under the relevant provision of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.

Read TaxNewsFlash-Asia Pacific

• EU: KPMG member firms in the EU submitted a memo with comments on proposed policy options for a new common corporate tax system in the EU referred to as the “Business in Europe: Framework for Income Taxation (BEFIT)” initiative.
• Montenegro: Amendments to the individual and corporate income tax laws are effective 30 December 2022
  
• Italy: A KPMG report examines the 2023 budget law tax measures, including DAC7 and a windfall profits tax on energy.
• Poland: The Supreme Administrative Court held that a merger of a company and a partnership through acquisition of the latter is treated, for purposes of determining the applicable corporate income tax consequences, as an in-kind contribution by the partners of the partnership to the company in exchange for shares in the company.
• Poland: The Supreme Administrative Court opined on the costs treated as deductible in connection with the sale of a Polish limited liability company (LLC), which was formed through transformation of a general partnership in anticipation of a sale of a controlling interest in the LLC.
• Poland: Taxpayers generally obligated to withhold income tax on payments may file an initial WH-OSC statement with the Head of the Lublin tax office indicating eligibility to withhold at a reduced tax rate or for an exemption from such obligation. The deadline for submitting a follow-up is the last day of the month following the end of the relevant tax year—so for calendar year taxpayers the deadline is 31 January 2023. 
• Lithuania: EU Directive 2019/1160—concerning cross-border distributions of collective investment undertakings—was transposed into Lithuanian domestic law.
• UK: The government launched a new consultation on further changes to the research and development (R&D) tax relief regimes, aiming to merge the two existing schemes into a single, simplified scheme based on the current R&D expenditure credit (RDEC) scheme.
• UK: The Court of Appeal (CoA) issued a decision concerning which elements of the nuclear decommissioning facility qualify for plant and machinery allowances (PMAs).
• UK: The final version of the regulations for UK mandatory disclosure rules (DAC6) were published.

Read TaxNewsFlash-Europe

• OECD: KPMG tax professionals submitted a memo with comments on the OECD’s public consultation document Pillar One - Amount B.
• OECD: The OECD released comments received on Pillar One - Amount A: Draft Multilateral Convention Provisions on Digital Services Taxes and other Relevant Similar Measures.
• OECD: The OECD/G20 Inclusive Framework (IF) on BEPS has agreed to a new assessment methodology for the peer review process under Action 14. In addition, the IF has agreed new data points to be reported in the annual mutual agreement procedure (MAP) statistics and the creation of a new annual framework for reporting advance pricing arrangement (APA) statistics.
• OECD: A KPMG report discusses the focus on country-by-country reporting (CbC) data under the Pillar Two minimum tax and public CbC reporting.
• Hungary: Changes regarding transfer pricing, effective for the 2022 fiscal year, include a new reporting obligation, year-end adjustments changes, and transfer pricing documentation changes.
• Netherlands: The Deputy Minister of Finance released a policy statement providing guidance on one of the measures to combat transfer pricing mismatches in the context of capital contributions—effective 25 January 2023.

Read TaxNewsFlash-Transfer Pricing

• Channel Islands: The government of Jersey announced that it will undertake certain FATCA and common reporting standard (CRS) compliance activities in 2023.
• Finland: The deadline for submitting FATCA and CRS annual information returns for 2022 is 31 January 2023.

Read TaxNewsFlash-FATCA / IGA / CRS

• KPMG reports published this week discuss:
  • Notable planning considerations, as well as unanswered questions, regarding the interplay between employer arrangements and the exemptions and/or adjustments related to the new stock buyback excise tax
  • Additional compliance obligations and other considerations with respect to the Petroleum Superfund tax
  • How taxpayers are navigating Form 1099-K compliance requirements in light of unclear guidance, and what payees can expect in the upcoming filing season
• Rev. Proc. 2023-9 provides new rules and conditions for implementing the optional safe harbor method of accounting (“Alternative Cost Method”) for real estate developers to determine when common improvement costs may be included in the basis of individual units in a real property development project for purposes of determining the gain or loss from sales of those units.
• Internal Revenue Bulletin 2023-1 provides six of the “annual revenue procedures” for 2023.
• The IRS announced that taxpayers in California affected by the winter storms, flooding, and mudslides beginning 27 December 2022, now have until 15 May 2023 to file various individual and business tax returns and make tax payments.

State and local tax

• A KPMG report provides state and local technology-related tax developments for the fourth quarter of 2022.
• The Florida Division of Administrative Hearings determined that although a vendor over collected sales tax on sales of electronically delivered software and computer hardware, it was not entitled to a refund.
• The Texas Comptroller proposed amendments to its margin tax apportionment rule.
• The Virginia Tax Commissioner found that a taxpayer failed to property elect to forego a net operating loss (NOL) carryback for the tax year at issue.

Read TaxNewsFlash-United States

• The IRS’ Exempt Organizations and Government Entities division published a new Technical Guide concerning excise taxes on self-dealing under section 4941.

Read TaxNewsFlash-Exempt Organizations

• The KPMG member firm in the Netherlands prepared a report that summarizes certain global tax-related developments that are relevant for companies involved in shipping and related industries.

Read TradeNewsFlash-Trade & Customs

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

• Indirect Tax
• Taxation of the Digitalized Economy
• Tax Dispute Resolution