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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 June and 30 June 2013.

Argentina Canada Mexico USA
Brazil Costa Rica Peru

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)
Argentina
Tax legislation adopted and regulatory update Tax amnesty 30 September 2013 Measures in Argentina provide tax amnesty with respect to certain unreported foreign currency holdings until 30 September 2013.
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Brazil
Tax legislation adopted and regulatory update Tax on financial operations June 2013 A decree reduces to 0 percent the rate of the “tax on financial operations” (Imposto sobre Operações Financeiras—IOF) for investments made with respect to Brazil’s futures and commodities markets and financial and capital markets.
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Canada
Tax legislation adopted and regulatory update GST/
reporting requirements
30 June 2013 Employers offering registered pension plans to employees, certain large businesses, and financial institutions may be required to complete and file complex GST/HST returns. Significant penalties can apply for non-compliance.
Some businesses may be surprised to discover that they satisfy the broad definition of a “financial institution” and thus are required to file these additional GST/HST returns by 30 June.
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  Personal tax and retail sales tax 13 June 2013 Legislation enacting certain tax measures included in Ontario's 2013 budget, and tabled as Bill 65, received Royal Assent on 13 June 2013.
For U.S. GAAP purposes, the legislation is considered enacted as of 13 June.
For IFRS and ASPE purposes, the legislation is considered “substantially enacted” as of 11 June 2013 (i.e., the date when Bill 65 received a third reading).
The legislation includes individual (personal) tax measures and retail sales tax measures.
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Proposed legislation Trusts and estates 2013 Canada’s Department of Finance has invited interested parties to submit their comments on proposals to eliminate the tax benefits that arise from among other things, taxing testamentary trusts and certain estates at graduated tax rates.
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Manitoba’s Budget 2013 Bill to enact Manitoba's 2013 budget measures received first reading in the provincial legislature on 30 May 2013.
Among other changes, Bill 47 includes measures to:
increase corporation capital tax on financial institutions to 5 percent (from 4 percent for fiscal years ending on or after 17 April 2013
increase the small business income limit eligible for the small business deduction to $425,000 (from $400,000) effective 1 January 2014
change the Manitoba dividend tax credit for non-eligible dividends effective 2014 (to reflect federal changes)
introduce the new rental housing construction credit.
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Retail sales tax 1 July 2013 Manitoba’s 2013 budget (presented in April 2013) included a provision that would increase the general rate of the retail sales tax (RST) to 8 percent (from 7 percent) effective 1 July 2013.
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Tariffs and customs 2013 Canada’s 2013 federal budget includes changes to tariffs and other customs measures that may affect companies that import goods into Canada.
The government announced changes that eliminate the tariffs on children’s clothing and sports equipment; revise the General Preference Tariff measures; and enhance the bonded warehouse rules.
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Government measures 2014 Canada’s federal government announced the launch of its online consultation process for the 2014 federal budget.
The Department of Finance has asked for interested parties to submit up to three recommendations for review until the pre-budget consultation period ends on 5 August 2013. After that, pre-budget hearings on six specific themes identified by Finance will be held in the fall.
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Treaties Information exchange agreements May 2013 Canada in May 2013 signed new tax information exchange agreements (TIEAs) with the British Virgin Islands and Brunei, based on the OECD's internationally agreed standard.
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Costa Rica
Tax legislation adopted and regulatory update VAT 2013 Guidance concerning the VAT rules in Costa Rica addresses the treatment of input VAT credits, and provides that:
Input VAT credits are restricted to goods directly used in the production, commercialization, and distribution process—i.e., a more restrictive application than appears in the statute.
The applicable rules relating to input VAT credits are the ones in effect on the date when the goods are purchased or acquired.
It may be possible to credit the amount of input VAT paid on the purchase of taxed services.
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Foreign corporations 2013 A tax in Costa Rica is imposed on all corporations, branches, and representatives of foreign corporations that are registered or will be registered before the National Registry.
“Inactive” entities must pay a tax in an amount equal to 25 percent of a monthly base salary (i.e., approximately $190).
“Active” entities must pay a tax in an amount equal to 50 percent of a monthly base salary (approximately $375).
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Mexico
Tax legislation adopted and regulatory update Government measures 31 May 2013 New tax measures (included in a law published in the official journal on 31 May 2013) in Mexico include (1) a requirement for pre-merger approval, and (2) revised rules with respect to tax receipts.
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Reporting requirements 31 July 2013 A provision in Mexico’s tax law changes, among other rules, the deadline to 31 July 2013 for information reporting filed by maquiladoras, manufacturing companies, and export services.
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Peru
Tax legislation adopted and regulatory update Customs 7 June 2013 A new law (published in the official gazette on 7 June 2013) modifies the customs law (Ley General de Aduanas), and provides an exemption from customs duties for imports of goods used by local, regional, and national governments in Peru.
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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
Administrative and case law Advanced pricing agreements Eaton Corp. v. Commissioner, 140 T.C. No. 18
(26 June 2013)
The U.S. Tax Court held it has jurisdiction to review an APA cancellation because this action is an administrative determination necessary to determine the merits of deficiency determinations, and that such review is on an abuse-of-discretion basis.
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