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International Tax

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This e-newsletter gives you an overview of international tax developments being reported globally by KPMG firms in the Asia Pacific region between 1 January and 31 January 2014.

Australia Hong Kong Malaysia Vietnam
Myanmar/Burma India Thailand  
China Kazakhstan Turkey  


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 Various tax issues January 2014 KPMG in Australia prepared reports on the following developments:
superannuation
tax policy in Australia
getting cross-border reporting for employees right
What could s258F share capital reductions mean for dividends?
non-cash consideration in mining exploration transactions
Division 40: prime cost methodology – depreciating second element costs.
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FATCA 10 January 2014 The Australian Department of Parliamentary Services on 10 January 2014 released a report providing an overview, requirements, and intergovernmental agreements under the U.S. legislation known as FATCA.
Read more
Proposed legislation R&D/dividend taxation January 2014 KPMG in Australia prepared reports on the following developments:
The federal government is going ahead with a measure that will prevent companies with Australian revenue exceeding AUS$20 billion from accessing the R&D tax incentive. Its impact is likely to prevent less than 20 larger company groups from receiving any benefits from the R&D tax incentive.
The Australian Taxation Office released a draft taxation determination that addresses the treatment of “dividend washing” schemes. When finalized, the guidance will apply to arrangements entered into both before and after its date of issue.
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Myanmar/Burma
Tax legislation adopted and regulatory update Banking and financial services sector 2013-2014 Changes over the past 18 months to the laws governing the banking and financial services sector in Myanmar (Burma) include a reduction in the quantum or sovereign debt, measures streamlining the micro-finance sector, and measures affecting the independence and expansion of the banking sector.
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China
Tax legislation adopted and regulatory update Tax incentives January 2014 There are various tax incentives available for the auto industry in China, provided certain requirements are met.
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Treaties DTT Beginning 2014 An income tax treaty between China and the United Kingdom entered into force on 13 December 2013, and is effective beginning 2014. The new tax treaty replaces the 1984 income tax treaty between China and the United Kingdom.
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Economic partnership agreement Beginning 2014 Beginning in 2014, a greater number of goods manufactured in Hong Kong and Macau qualify for duty-free entry into China under the China-Hong Kong and China-Macau closer economic partnership agreements.
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Other E-commerce January 2014 China’s e-commerce industry has grown within the business-to-consumer and consumer-to-consumer sectors via “homegrown” platforms, social media, and mobile devices.
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Hong Kong
Tax legislation adopted and regulatory update Profits tax/ Captive insurance companies 2013-2014 Legislation in Hong Kong was introduced into the Legislative Council on 8 January 2014 to provide a profits tax concession to captive insurance companies for profits from their business of insurance of offshore risks. These profits are to be chargeable to profits tax at one-half of the normal rate, that is, 8.25 percent.
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India
Tax legislation adopted and regulatory update Tax compliance 3 February 2014 The Central Board of Direct Taxes revised the process of allotment of the permanent account number (PAN) with effect from 3 February 2014.
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Industrial incentives 31 March 2017 A package of industrial incentives for the states of Himachal Pradesh and Uttarakhand has been extended to 31 March 2017. New industrial units and existing units with “substantial expansion” are eligible for a central capital investment subsidy at the rate of 15 percent of investment in plant and machinery, subject to a ceiling of INR 3 million.
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Transfer/ issuance of securities January 2014 The Reserve Bank of India amended the regulations that apply concerning the transfer or issuance of a security by persons outside India. The new changes allow the issuance of non-convertible/redeemable bonus preference shares or debentures (bonus instrument) to non-resident shareholders under certain circumstances.
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Various tax issues January 2014 KPMG in India prepared reports on the following developments:
developments in special economic zone, export oriented unit "schemes"
Central Board of Direct Taxes directives on safe harbor rules.
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Administrative and case law Various tax issues January 2014 Case law has been published in India with respect to the following subjects:
payment for “transfer of right to purchase flat” is “capital gain” income
income of liaison office providing promotion and product sales services in India is taxable
interest expense not disallowed under section 14A because the taxpayer had sufficient funds available for investment
interest income and import entitlement sale consideration eligible for tax benefit (deduction) under section 10B
employee contributions deposited after due date but before return’s filing date.
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January 2014 Case law has been published in India with respect to the following subjects:
payment for transfer of copyright in a feature film for 99 years is “sale” and not royalty
no tax liability attributable to foreign company without establishing that income is attributable to PE in India
clarification of Supreme Court decision on excise tax.
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Transfer pricing CIT v. Global Vantedge Pvt. Ltd. (ITA No. 1828/2010) India’s Supreme Court dismissed the tax authority’s “special leave petition” that effectively leaves in place a decision of the Delhi High Court that the arm’s length value of international transactions cannot exceed the total revenue earned by the taxpayer and related party from third-party contracts.
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KPMG publications Various taxes 2013 KPMG in India has prepared a 39-page report summarizing key direct and indirect tax-related developments for 2013.
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KPMG in India has prepared a report that collects and provides hyperlinks, in table format, of tax developments in India occurring during 2013.
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Kazakhstan
Treaties DTT December 2013 An income tax treaty between Kazakhstan and Luxembourg entered into force in December 2013.
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Malaysia
Tax legislation adopted and regulatory update Transfer pricing 1 April 2013 Malaysia’s tax authority, the Inland Revenue Board, released the framework for transfer pricing audits (effective 1 April 2013).
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Thailand
KPMG publications Tax compliance 2014 KPMG in Thailand prepared a "tax calendar" that provides, in table format, the filing requirements and deadlines for tax returns and payments for the 2014 year.
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Turkey
Tax legislation adopted and regulatory update Transfer pricing 2014 New guidance issued by Turkey’s Capital Markets Board (Sermaye Piyasasi Kurulu) requires additional information reporting about controlled transactions of listed companies and, thus, may affect the transfer pricing disclosures by these companies.
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Consumption tax 1 January 2014 Changes to Turkey’s special consumption tax rates are effective beginning 1 January 2014.
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Vietnam
Tax legislation adopted and regulatory update Various taxes 2014 Recent tax developments in Vietnam include the following items:
New tax forms are to be used by organizations and entities in Vietnam beginning 1 January 2014 (Decree No. 156/2013/TT-BTC).
Enterprises are to pay trade union dues at a rate of 2 percent of total salary amounts used to compute for social insurance contributions (Decree No. 191/2013/ND-CP).
Regional minimum wage amounts are established for individuals working in those areas (Circular No. 33/2013/TT-BLDTBXH).
Enterprises must apply the VAT method in 2014 if they satisfy certain conditions (Official letter No. 17557/BTC-TCT).
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Corporate income tax 15 February 2014 New guidelines in Vietnam concerning the determination of corporate income tax are effective 15 February 2014, and apply for 2014 and subsequent tax periods.
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Transfer pricing 5 February 2014 Vietnam’s Ministry of Finance has issued guidance establishing the application procedures, approval process, and governing rules for Vietnam’s APA regime.
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