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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 American Region between 1 August and 31 August 2013.

Argentina Canada Dominican Republic Peru
Barbados Cayman Islands Latin America USA
Bermuda Colombia Mexico Venezuela
Brazil Costa Rica Panama  

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 Corporate income tax/ tax compliance 1 August 2013 Taxpayers’ use of Argentina’s online tax return system for reporting gross revenue to local jurisdictions is mandatory beginning 1 August 2013.
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Barbados
Proposed legislation Corporate income tax/ individual income tax 2013 Barbados has proposed several changes to its tax system in the 2013 budget delivered on 13 August 2013. Among the tax proposals, there are provisions that would:
Impose a temporary 0.2% tax on the assets of commercial banks (effective for 19 months beginning September 2013)
Allow international business companies to obtain multi-year licenses, for a maximum of three years
Introduce five-year residence permits for individuals who own “substantial property” in Barbados
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Bermuda
Proposed legislation FATCA August 2013 Bermuda’s Ministry of Finance announced plans for adoption of the FATCA Model 2 intergovernmental agreement.
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Brazil
Tax legislation adopted and regulatory update Transfer pricing 1 January 2013 New guidance from the Ministry of Finance establishes the “spread” margin with respect to interest rates applicable on loans between related parties (and therefore subject to Brazil’s transfer pricing rules).
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Canada
Tax legislation adopted and regulatory update British Columbia taxation 27 June 2013 British Columbia legislation containing an increase in both individual and corporate tax rates received Royal Assent on 25 July 2013. Read more
Corporate income tax/ tax compliance 23 October 2013 The due date for the first “reportable transaction information return” (Form RC312) required under Canada’s new federal aggressive tax planning reporting regime is 23 October 2013.
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26 June 2013 There is an apparently unintended technical glitch in the credit union amendments included in Bill C-60 (Canada’s 2013 federal budget bill #1) enacted 26 June 2013.
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Tax compliance 31 December 2013 Certain organizations in Canada that qualify as a "municipal or public body performing a function of government in Canada" must register with the Canada Revenue Agency by 31 December 2013 to begin or to continue to be recognized as a "qualified donee" with the ability to issue official donation receipts and receive gifts from registered charities after 2013.
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Individual income tax 1 October 2013 Individuals in Canada need to consider acting quickly to realize future tax savings before the 1% prescribed interest rate for family income-splitting loans is increased to 2%, effective 1 October 2013.
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Tax Compliance 1 July 2013 The Canada Revenue Agency officially confirmed that the revised Form T1135 applies to tax years ending after 30 June 2013 and that, accordingly, old form T1135 will still be accepted for tax years that ended prior to 1 July 2013.
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FATCA 30 June 2014 Canadian multinational companies with U.S. source income—including inter-company payments from a U.S. subsidiary—must provide information required under the U.S. FATCA.
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Canadian banks and certain other non-U.S. entities must comply with new withholding rules and information gathering requirements that take effect 30 June 2014 under the U.S. FATCA.
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Proposed legislation Anti-avoidance measures 3 December 2013 The Department of Finance released a 25-page consultation paper on possible measures to prevent treaty shopping, and invited stakeholders to comment the following seven questions / issues by 3 December 2013. 
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Foreign-based multinationals and foreign corporations investing in or through Canada will want to closely follow developments as Canada kicks off formal consultations on possible measures to combat “treaty shopping” abuses and the related erosion of the country’s tax base.
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Corporate income tax 15 October 2013 Canada’s Department of Finance on 16 August 2013 released a 26-page package of amendments to the foreign affiliate dumping rules—nine pages of draft legislation and 17 pages of explanatory notes.
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6 November 2013 Department of Finance released a 48-page package of amendments that would implement changes to the exemption test and other life insurance policyholder taxation rules (24 pages of draft legislation and 24 pages of explanatory notes).
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Treaties DTT 1 October 2013 Canada’s Finance Department announced that the second Protocol to the income tax treaty between Canada and Austria will enter into force 1 October 2013.
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Other DTT/MAP 2012-2013 Statistics from the Canada Revenue Agency concerning the 2012-13 MAP program reveal:
That 114 MAP cases were concluded in 2012-13 (up from 97 cases in 2011-12 or an 18% increase)
Nine cases received no relief or partial relief from the program (up from eight in 2011-12)
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Cayman Islands
Treaties FATCA/TIEA August 2013 Representatives of the governments of the Cayman Islands and the United States concluded negotiations and initialed a Model 1 intergovernmental agreement, and a new tax information exchange agreement.
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Colombia
Treaties DTT/ TIEA August 2013 Colombia has completed the legislative ratification procedures for income tax treaties with India and Korea and for a tax information exchange agreement with the United States.
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Costa Rica
Tax legislation adopted and regulatory update Corporate income tax 20 May 2013 Costa Rica’s Health Ministry issued a directive eliminating “environmental viability” as a requirement for purposes of processing an application for renewal of sanitary operating permits.
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Dominican Republic
Tax legislation adopted and regulatory update Individual income tax August 2013 A “taxpayer bill of rights” has been formalized in the Dominican Republic, to help taxpayers understand what assistance can be expected and what inquiries can be made of the tax authorities.
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Latin America
Tax legislation adopted and regulatory update Corporate income tax 2013 Multinational entities that are contemplating selling shares of a Latin American holding company or transferring shares in a reorganization involving Latin American subsidiaries must carefully evaluate the tax consequences of indirect share transfers—particularly if the indirect share transfers occur in transaction involving Chile, Peru, Panama, and/or the Dominican Republic.
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Mexico
Tax legislation adopted and regulatory update Information exchange pilot program 31 July 2013 Mexico has entered into a “pilot program” for the exchange of tax information with five European countries—France, Germany, Italy, Spain, and the United Kingdom.
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Corporate income tax August 2013 A release from Mexico’s tax administration announces the launch of an audit program, under which the tax administration will move to verify tax compliance by entities with certain supply chain structures in Mexico.
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Panama
Tax legislation adopted and regulatory update Corporate income tax/ individual income tax 7 August 2013 Panama’s finance ministry issued a decree addressing the tax treatment of permanent establishments in Panama and the rules for determining the tax residences of companies and individuals.
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Transfer pricing 7 August 2013 Panama’s finance ministry issued a decree with new rules for transfer pricing documentation and studies.
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Peru
Tax legislation adopted and regulatory update Corporate income tax/ tax compliance 14 August 2013 Peru’s tax administration approved an alternative procedure for submitting proof of food spoilage to the tax authorities.
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USA
Tax legislation adopted and regulatory update Transfer pricing December 2011 The Treasury Department and IRS released for publication in the Federal Register final regulations that implement the use of the differential income stream as a consideration in assessing the best method in connection with a cost sharing arrangement and as a specified application of the income method.
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- - 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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Venezuela
Tax legislation adopted and regulatory update Individual income tax 1 January 2013-31 December 2015 A decree provides “registered” individuals with an exemption from income tax for income from their agricultural, forestry, cattle, poultry, and fishery-related activities.
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