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

Bahamas Colombia Jamaica Nicaragua
Canada Costa Rica Latin America Panama
Chile El Salvador Mexico USA

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

To contact the Global International Corporate Tax Group email go-fmglobalict@kpmg.com.

  Tax area concerned Relevant date/case reference Description of measures and publication link
(Considerations in italic where necessary)
Bahamas
Proposed legislation VAT 1 July 2014 The Ministry of Finance anticipates that a VAT regime would be introduced in the Bahamas by 1 July 2014. Read more

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Canada
Proposed legislation Business tax 27 March Prince Edward Island's Minister of Finance on 27 March 2013 tabled the province's 2013 budget which provides for an increase in the small business income tax rate by 3.5 percent to 4.5 percent for 2013. Read more
Nova Scotia budget 2013 Nova Scotia Finance Minister delivered the province’s 2013 budget which proposes a reduction in the small business income tax rate for 2014 and a reduction of the small business limit threshold to reduce the province’s Harmonized Sales Tax rate beginning in 2014. The budget includes other corporate and individual (personal) tax changes. Read more
Manitoba budget 2013 Manitoba’s Finance Minister delivered the province’s 2013 budget. The budget increases the provincial sales tax rate to 8 percent (from 7 percent), starting 1 July 2013, and increases the individual (personal) tax rate on non-eligible dividends, commencing 2014. Read more
Federal budget 2013 Employers and registered pension plans may want to take advantage of some changes to the ‘GST/HST pension plan rules’ announced in Canada’s recent federal budget. The 2013 federal budget proposes two measures that could reduce some employers’ compliance requirements:
an election to allow qualifying employers not to account for GST/HST on actual taxable supplies made to pension entities, and
a relief measure for some employers with limited amounts of deemed taxable supplies. Read more
Tax legislation adopted and regulatory update Indirect tax April 2013 Banks and insurance companies are in the midst of another round of changes to indirect tax laws and administrative policies. Changes include the return to GST and PST in British Columbia, changes to the Quebec Sales Tax affecting financial services and increased Canada Revenue Agency audit activities related to GST/HST on various transaction including cross-border charges from related entities. Read more
Indirect tax 2013 Securities dealers need to be aware of changes to Canada’s indirect tax laws and administrative policies. Read more
Corporate income tax 2013 Companies that allocate their taxable income to permanent establishments in more than one province may need to change their calculations for their 2013 tax years. Under a new administrative position, all taxable benefits that are included in calculating an employee's income for the year (including deemed amounts such as stock option benefits) are included in salaries and wages paid in the year to employees for purposes of the provincial income allocation calculations in the Income Tax Regulations. Read more
Tax Legislation adopted and regulatory update Corporate and personal income tax April 2013 The Canada Revenue Agency launched its income tax folio publications — a series of technical updates/information which is found in income tax interpretation bulletins. Read more
Administrative and case law Corporate income tax April 2013 CAE Inc. v. The Queen (2013 FCA 92) Federal Court of Appeal issued a taxpayer-favorable decision in a case concerning the classification of amounts received when the taxpayer sold assets that were part of a sale-leaseback arrangement. The Federal Court of Appeal reversed a decision of the Tax Court of Canada, and found that the taxpayer realized capital gain (and not income) when it sold assets that were part of a sale-leaseback arrangement. Read more

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Chile
Tax legislation adopted and regulatory update Real estate 1 January 2013 There are new measures in Chile for determining the tax base of certain types of real property (specifically, property not used in farming or not used for residential purposes) that may result in increased property tax assessments. Read more

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Colombia
Tax legislation adopted and regulatory update VAT 12 February 2013 A decree in Colombia provides guidance with respect to filing VAT returns and remitting sales tax. KPMG in Colombia has provided a report that includes the schedules for when to file VAT returns and when to remit sales tax. Read more
Indirect tax 15 April 2013 Colombia's ministry of commerce, industry and tourism issued a decree providing that pre-import authorization of certain textiles and alcoholic beverages is no longer required as of 15 April 2013. Read more

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Costa Rica
Treaties Convention on mutual administrative assistance April 2013 Costa Rica has ratified an international agreement on tax transparency.
According to an April 2013 release, the Organisation for Economic Co-operation and Development (OECD) announced that Costa Rica ratified the OECD Convention on Mutual Administrative Assistance in tax matters. The purpose of this OECD agreement is to counter cross-border tax evasion and to provide for compliance with national tax laws. Read more

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El Salvador
Tax legislation adopted and regulatory update Personal income tax 2012 El Salvador's tax administration has provided information for individual taxpayers to follow in submitting their income tax returns electronically for tax year 2012. Read more

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Jamaica
Proposed legislation Budget 2013 No new taxes are proposed in Jamaica's budget for 2013. Instead, the focus of the tax measures is on the collection of outstanding taxes and the removal of inefficiencies and distortions of the tax system. Read more

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Latin America
Other Tax facts 2013 Taxpayers conducting business in Argentina, the Dominican Republic, Colombia, Panama, El Salvador, Guatemala, Ecuador, and Mexico need to be aware of the minimum taxes (or minimum taxable bases) imposed by certain Latin American countries — taxes that are designed so that taxpayers pay some taxes despite generating little or no profitability. The foregoing needs to be considered in determining cash/tax projections, in heading off foreign tax credit issues and in computing the global effective tax rate. KPMG's Americas Center has issued a discussion in this respect. Read more

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Mexico
Proposed legislation Corporate income tax March 2013 A legislative proposal to change the taxation of the mining sector is pending before Mexico’s Chamber of Deputies. The bill (introduced in March 2013) would make changes to Mexico’s mining act and the tax coordination act. More specifically, it would:
introduce a levy (regalía minera or “royalty”) of 4 percent on net income (as determined pursuant to Mexico’s income tax law) on an entity’s mining production activities;
increase collections from non-productive or inactive mining concessions. Read more

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Nicaragua
Tax legislation adopted and regulatory update Corporate and personal income tax December 2012 Tax concepts enacted as part of Nicaragua's tax law in late December 2012 include new revenue classifications (work income, income from economic activities, capital income and capital gains/losses), tax residents, permanent establishments, tax havens and transfer pricing. Read more

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Panama
Tax legislation adopted and regulatory update Corporate income tax April 2013 Panama's tax authorities have established procedures by which certain multinational entities may achieve tax certainty with respect to their investments. An April 2013 decree provides that companies operating under the multinational headquarters regime (regimen de Sede de Empresas Multinacionales) may be eligible for a 'tax stability' agreement for certain investments (estabilidad juridical a las inversions). Read more

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USA
Tax legislation adopted and regulatory update - - For legislative changes and regulatory updates for the US, please visit below link to the TaxNewsFlash United States.
Read TaxNewsFlash US

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