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Week in Tax: January 6 – 10, 2025

Recent tax developments from around the globe for the week of January 6 – 10, 2025

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January 13, 2025

KPMG Week in Tax—published weekly to provide an overview of tax developments as reported in TaxNewsFlash—includes summaries of select tax-related news followed by a full list of reports (more information can be found at the links provided). Highlights these two weeks include:

  • United States: The U.S. Treasury Department and IRS released regulations and guidance concerning the classification of digital content and cloud transactions, environmental justice clean electricity capacity limitation program, identification of certain partnership "basis shifting" transactions as transactions of interest, clean electricity production and investment credits, disregarded payments and dual consolidated losses, tax imposition on gifts and bequests from covered expatriates, micro-captive transactions, automatic enrollment requirements, BEAT rules for qualified derivative payments, catch-up contributions to retirement plans, section 45W credit for clean vehicles, and clean fuel production credit under section 45Z. Read TaxNewsFlash
  • Italy: The budget law expands the digital service tax (DST) by removing the €5.5 million revenue threshold for digital services in Italy, making any business with worldwide revenues over €750 million subject to DST if they earn any revenue from digital services. Additionally, a payment on account system is introduced, requiring businesses to pay 30% of the previous year's DST liability by November 30, with the balance due by May 16, necessitating immediate procedural adjustments for affected businesses. Read TaxNewsFlash
  • Oman and Kuwait: Legislation in both countries would implement a 15% domestic minimum top-up tax (DMTT) on multinational groups with revenues exceeding €750 million. Read TaxNewsFlash

United States

  • Final and proposed regulations: Classification of digital content and cloud transactions for purposes of international provisions of the Code
  • Final regulations and Rev. Proc. 2025-11: Guidance on environmental justice clean electricity capacity limitation program
  • Final regulations: Certain partnership “basis shifting” transactions identified as transactions of interest
  • Final regulations: Clean electricity production and investment credits under sections 45Y and 48E
  • Final regulations: Guidance regarding certain disregarded payments and dual consolidated losses (DCLs)
  • Final regulations: Guidance under section 2801 regarding the imposition of tax on certain gifts and bequests from covered expatriates
  • Final regulations: Micro-captive listed transactions and micro-captive transactions of interest
  • Proposed regulations: Automatic enrollment requirements under section 414A
  • Proposed regulations: Base erosion and anti-abuse tax (BEAT) rules for qualified derivative payments (QDPs) on securities lending transactions
  • Proposed regulations: Guidance on catch-up contributions to retirement plans
  • Proposed regulations: Guidance on section 45W credit for qualified commercial clean vehicles
  • Treasury and IRS release guidance on clean fuel production credit under section 45Z
  • IRS announces extra day for taxpayers to file any returns, pay any tax due January 9
  • IRS provides tax relief for taxpayers affected by California wildfires
  • National Taxpayer Advocate report to Congress identifying taxpayer problems
  • Rev. Rul. 2025-3 and Rev. Proc. 2025-10: Guidance on definition of employee under section 530 of the Revenue Act of 1978
  • KPMG article: Commensurate with income standard in transfer pricing
  • KPMG report: Analysis and observations on investment tax credit for energy property under section 48
  • KPMG report: Observations on amendments to section 52 regulations as part of amendments to consolidated return regulations

Read TaxNewsFlash-United States

  • JCT list of expiring federal tax provisions, 2024 – 2034
  • Outline of tax priorities upon confirmation of Senate Finance Chairman Crapo

Read TaxNewsFlash-Legislative Updates

  • “Qualified disaster” declaration allows employers and employer-sponsored charities to provide relief (California)

Read TaxNewsFlash-Exempt Organizations

Transfer Pricing

  • Barbados: Extension of deadline for country-by-country reports
  • Denmark: Taxpayer prepared adequate transfer pricing documentation and related party payments were arm’s length (Supreme Court decision)
  • El Salvador: Program to enhance audit and investigation capabilities for tax crimes and transfer pricing
  • India: Report on advance pricing agreement (APA) program
  • Ireland: Application of Pillar Two global minimum tax rules to fund vehicles and securitization entities
  • Kuwait: Legislation implementing Pillar Two global minimum tax rules
  • North Macedonia: Parliament adopts law implementing Pillar Two global minimum tax rules
  • Oman: Legislation implementing Pillar Two global minimum tax rules
  • Sri Lanka: New advance pricing agreement (APA) guide
  • KPMG article: Commensurate with income standard in transfer pricing
  • KPMG article: Examination of UK’s “one-way street” transfer pricing rule

Read TaxNewsFlash-Transfer Pricing

Americas

  • Anguilla: GST compliance announcement for commercial rental properties
  • Barbados: Extension of deadline for country-by-country reports
  • Canada: 2024 tax rates and other changes to consider for tax accounting purposes
  • Canada: Parliament suspended until March 2025, effect on tax legislation
  • El Salvador: Program to enhance audit and investigation capabilities for tax crimes and transfer pricing
  • Mexico: Tax measures in miscellaneous fiscal resolution for 2025

Read TaxNewsFlash-Americas

Asia Pacific

  • Bahrain: Updated VAT manuals
  • China: Updated list of industries in western regions eligible for reduced enterprise income tax
  • China: Updated tax policies on residential properties, tax refund for property reinvestment
  • India: GST rule imposing restrictions on exporters’ rights to claim refunds held invalid (High Court decision)
  • India: No requirement to withhold tax on sales of goods to banks
  • India: Relief for certain filing delays by taxpayers claiming concessional corporate income tax rate
  • India: Report on advance pricing agreement (APA) program
  • Kazakhstan: Pilot project for automated VAT balance calculations
  • Korea: Direct and indirect tax incentives to promote foreign investment announced
  • Kuwait: Legislation implementing Pillar Two global minimum tax rules
  • Oman: Legislation implementing Pillar Two global minimum tax rules
  • Saudi Arabia: E-invoicing requirement extended to 19th group of taxpayers from September 30, 2025
  • Sri Lanka: New advance pricing agreement (APA) guide
  • Sri Lanka: Procedure for withholding tax on payments to nonresidents

Read TaxNewsFlash-Asia Pacific

Europe

  • Bulgaria: Proposed mandatory use of SAF-T report
  • Cyprus: Zero VAT rate on basic goods through 2025
  • Czech Republic: Changes in taxation of immovable property in 2025
  • Denmark: Taxpayer prepared adequate transfer pricing documentation and related party payments were arm’s length (Supreme Court decision)
  • Ireland: Application of Pillar Two global minimum tax rules to fund vehicles and securitization entities
  • Italy: Budget law expands scope of digital service tax
  • Latvia: Tax card for 2025
  • Moldova: New tax return form for small and medium-sized enterprises
  • North Macedonia: Parliament adopts law implementing Pillar Two global minimum tax rules
  • Poland: Contractual penalty for failure to provide services on time not excluded from tax-deductible costs (Supreme Administrative Court decision)
  • Poland: Updated list of countries and territories applying harmful tax competition
  • Portugal: Charges on telecom operators held unconstitutional (Constitutional Court decision)
  • Slovakia: Proposed mandatory e-invoicing from January 1, 2027
  • Slovenia: Amendments to tax procedure law, amendments and clarifications to corporate income tax law
  • Slovenia: Proposed amendments to excise duties
  • UK: Capital gains tax rate changes in 2024 Autumn Budget accompanied by anti-forestalling measures
  • KPMG article: Examination of UK’s “one-way street” transfer pricing rule

Read TaxNewsFlash-Europe

Trade & Customs

  • U.S. Treasury furthers sanctions targeting Russian oil production and exports
  • U.S. CBP proposes rule for electronic submission of rail cargo export manifests
  • EU-Chile interim trade agreement will enter into force on February 1, 2025
  • KPMG report: Shipping and offshore tax update (January 2025)

Read TradeNewsFlash-Trade & Customs

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