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International Tax

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This e-newsletter gives you an overview of international corporate tax developments being reported globally by KPMG firms in the Asia Pacific region between 1 November and 30 November 2013.

Australia Cyprus Japan Singapore
Cambodia Hong Kong New Zealand Taiwan
China India Pakistan Vietnam


For a full summary of global tax developments, visit kpmg.com/TaxNewsFlash.

To contact the International Tax Group email internationaltax@kpmg.com.

  Tax area concerned Relevant date/case reference Description of measures and publication link
(Considerations in italic where necessary)
Australia
Tax legislation adopted and regulatory update Tax compliance November 2013 Taxpayers may want to consider certain action steps with respect to positions taken in compiling fixed asset registers and to verify that such positions are appropriately documented and supported.
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R&D November 2013 The KPMG member firm in Australia prepared reports on the following developments:
R&D tax incentive claims must survive Australian taxation office scrutiny
R&D tax incentive interaction where grants received
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Transfer pricing November 2013 The recent introduction of subdivision 815 has provided the Commissioner with significantly broader powers to make transfer pricing adjustments in Australia.
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Various taxes November 2013 The KPMG member firm in Australia prepared reports on the following developments:
GST on fees and charges
Australia’s interest withholding tax regime
encouraging investment in Australia
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Transfer pricing November 2013 Have you declared your transfer pricing adjustments to Australian Customs?
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Cambodia
Tax legislation adopted and regulatory update VAT November 2013 Cambodia’s tax authorities issued guidance concerning the VAT procedures relating to sales of certain real estate and the tax registration requirements for businessmen and organizations.
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China
Tax legislation adopted and regulatory update International operations November 2013 As China’s national economy continues to globalize, it is important to see how this is playing out at the corporate level. A number of Chinese companies—both state-owned and private—are successfully internationalizing operations, in many cases in a matter of a few years.
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R&D November 2013 China’s Ministry of Finance and the State Administration of Taxation jointly issued guidance that broadens the scope of R&D expenses that are eligible for the “super deduction.”
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Cyprus
Tax legislation adopted and regulatory update VAT 20 August 2013 The rules for VAT with respect to services provided to persons established in Cyprus were clarified with the issuance of guidance (Circular 178 (20 August 2013)).
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Hong Kong
Proposed legislation Private equity funds/ REIT 18 November 2013 The Financial Services Development Council in Hong Kong issued six new research papers—two of which contain proposed changes to the taxation of private equity funds, and proposed changes to the Hong Kong real estate investment trust market.
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India
Tax legislation adopted and regulatory update Transfer pricing November 2013 India’s Ministry of Finance issued a release identifying Cyprus as a “notified jurisdictional area” with respect to transactions entered into by any Indian taxpayer with a person located in Cyprus—thus, invoking application of India’s transfer pricing rules.
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Administrative and case law Various taxes November 2013 Case law has been published in India with respect to the following subjects:
non-resident taxpayer must pay interest on its liability for advance tax that was not remitted
stamp tax valuation provisions concerning real property held as stock-in-trade apply prospectively
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MAP UPS Worldwide Forwarding Inc. v. ADIT/DIT The Bombay High Court held that when a mutual agreement procedure allows for assessment proceedings to be deferred and for tax collection efforts to be suspended for prior years, the tax assessment deferral and collection suspension also may apply to subsequent years, provided the taxpayer furnishes an adequate bond guarantee.
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DTT November 2013 Case law has been published in India with respect to the following subject:
leather testing charges are taxable as “fees for technical services” under tax treaty with Germany
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Income tax November 2013 Case law has been published in India with respect to the following subjects:
income for services rendered outside India not taxable in India, and there was no requirement to withhold tax (even under retroactive application of tax law changes)
income from time charter of ships between Indian ports is taxable as royalty
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Japan
Tax legislation adopted and regulatory update Tax compliance 2013 Japan’s tax reform in 2012 included a new reporting requirement for overseas assets held by individual residents—reflecting an effort to enhance the ability of the Japanese tax authorities to collect this information.
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Proposed legislation Consumption tax November 2013 The Ministry of Finance presented a report addressing the consumption tax treatment of cross-border supplies of services and intangibles at a meeting of a discussion group of the government’s tax commission.
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PE income October 2013 The Ministry of Finance submitted a report that includes proposals for changes intended to mitigate double taxation / no taxation issues by generally adopting the “attributable income principle” with respect to the income of PEs.
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New Zealand
Proposed legislation Various taxes November 2013 A draft bill introduced in New Zealand, if enacted, would:
affect the rules for taxation of employee allowances, including accommodation when employees are working away from their normal workplace
extend the inbound thin capitalization rules to cover non-residents acting together when investing in New Zealand
tax certain lease assignment payments
implement the government’s budget announcements concerning the deductibility relating to “black hole” patent, resource consent, and company administration costs
address various GST and other policy matters and remedial tax amendments
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Tax compliance November 2013 New Zealand’s Inland Revenue Department is proposing minimum requirements for small and medium-size enterprise financial statements to support SME tax returns.
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Various taxes 2014-2015 New Zealand’s Minister of Revenue released the government’s tax policy work plan for 2014-2015. The key focus areas are:
improvements to tax and social policy rules, including a review of tax rules for annuities, closely held companies, and measures to improve growth and innovation, including a R&D proposal
International tax reform, including an active income exemption for branches, mutual recognition, and various items on the recent OECD tax action plan
Inland Revenue Department business transformation to deliver a 21st century tax system
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Pakistan
KPMG Publications Doing business in Pakistan 2013 The KPMG member firm in Pakistan released a booklet providing information on a number of subjects relevant for investment planning or doing business in Pakistan.
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Singapore
Tax legislation adopted and regulatory update Taxation of accommodation benefits 1 January 2014 The Inland Revenue Authority of Singapore released guidance summarizing significant changes to the taxation of accommodation benefits.
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Fund management sector November 2013 The Monetary Authority of Singapore announced changes to enhance the existing tax regime for fund management firms.
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Administrative and case law Exchange of information Comptroller of Income Tax v. BJY/Comptroller of Income Tax v. BLM The Singapore High Court released two judgments involving requests of the Comptroller of Income Tax for orders directing Singapore banks to release tax information per the request of two tax treaty partner countries—India and Japan. The applications were made pursuant to exchange of information requests by the Indian and Japanese tax authorities.
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Taiwan
Treaties Customs agreement 1 January 2014 A customs agreement between New Zealand and the customs territory that includes Taiwan will enter into force 1 January 2014.
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Vietnam
Tax legislation adopted and regulatory update Corporate income tax November 2013 The Vietnam tax authorities issued “official letters” providing that:
business establishments are not entitled to corporate income tax incentives for investment projects if implementation of the investment project is delayed by two years.
local tax departments must inspect the implementation of set up, management, and usage of severance allowances.
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