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 August and 31 August 2012.
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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 |
CIT and Customs |
17 May 2012 |
Certain tax and customs benefits previously allowed with respect to the production and export of oil and gas are no longer available.
Read more
Taxpayers involved in the oil and gas sector may want to consider how the federal and provincial governments may implement the new rules and how to address the tax implications of the new provisions. |
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| Brazil |
| Tax legislation adopted and regulatory update |
Pre-export financing regime |
28 June 2012 |
One of the restrictions introduced earlier this year to the pre-export financing regime has now been abolished.
Read more |
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| Canada |
| Proposed legislation |
Corporate income tax |
21 August 2012 |
Section 100 provides that a taxpayer's gain on the disposition of a partnership interest may be recalculated when there is a sale of a partnership interest to an entity exempt from tax.
Canada has now released a proposal to apply section 100 to a taxpayer's gain on (1) the sale of a partnership interest to a non-resident person, or (2) an indirect transfer of a partnership interest to a non-resident person or a tax-exempt entity.
Read more |
| 21 August 2012 |
New proposed Foreign Affiliate dumping rules are intended to curtail the use of Canada’s foreign affiliate system where the relevant Canadian company is controlled by a non-resident corporation.
Read more |
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13 August 2012 |
Current legislation determines the amount by which the cost of non-depreciable capital property may be increased or ‘bumped’ on the winding-up of a subsidiary into a parent corporation. Legislation has been proposed which reduces the amount of ‘bump’ available for an interest in a partnership held by the subsidiary.
Read more |
| August 2012 |
The Department of Finance released draft legislation that reflects its 2012 federal budget proposals to modify the thin capitalization rules to reduce the debt-to-equity ratio to 1.5:1 (from 2:1), extend the rules to partnership debt, and introduce a new deemed dividend rule for excess interest expense on 14 August 2012.
Read more |
| August 2012 |
Canada’s Department of Finance released draft legislation for most of the remaining tax items announced in the 2012 federal budget including changes affecting the international tax, scientific research and experimental development (SR&ED) program and other corporate and personal tax rules. Finance has requested comments by 13 September 2012.
Read more |
| August 2012 |
Canada proposed changes to the shareholder loan rules. The proposed changes would allow an elective imputation of interest on a ‘pertinent loan or indebtedness’ that would otherwise have given rise to a deemed dividend.
Read more |
| Tax legislation adopted and regulatory update |
NPO |
2012 |
The Canada Revenue Agency has undertaken a three-year ‘NPO risk identification project’ to audit about 1,500 NPOs (non profit organizations).
Read more |
| Other |
August 2012 |
The Canada Revenue Agency has launched Charity Quick View, a new online tool which provides a summary of a registered charity's activities, revenues, and expenditures.
Read more |
| 1 October 2012 |
The Finance Department and the Canada Revenue Agency have launched a joint consultation process on the impact of contingency fees charged by tax preparers on the effectiveness of the scientific research and experimental development tax incentive program. The deadline for submitting comments is 1 October 2012.
Read more |
| Administrative and case law |
Corporate income tax |
The Queen v. John H. Craig (1 August 2012) |
The Supreme Court of Canada held that a taxpayer (a lawyer who ran a law practice) could deduct losses from a horse racing business without restriction against all sources of income, pursuant to a correct application of the restricted farm loss rules.
Read more |
| Treaties |
DTT |
16 December 2011 |
Canada and Switzerland signed an agreement that modifies the Interpretative Protocol of the Canada-Switzerland treaty so that the interpretation follows the standard of OECD.
Read more |
| Other |
Indirect tax |
2012 |
KPMG Canada has prepared a checklist to help clients to determine whether an indirect tax review may be worthwhile and to help assess the impact on the organization of the challenges posed by the recent and upcoming changes.
Read more on the impact on insurance companies and banks. |
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| Chile |
| Proposed legislation |
Tax Reform |
2 August 2012 |
Chile submitted a new tax reform package in August. The tax reform package includes proposals for increased rates of corporate income tax, changes to the transfer pricing rules, and other provisions that could affect foreign investors with a presence in Chile.
Read more |
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| Costa Rica |
| Treaties |
Exchange of information |
14 August 2012 |
The tax information exchange agreement between Canada and Costa Rica entered into force 14 August 2012.
Read more |
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| Ecuador |
| Tax legislation adopted and regulatory update |
Corporate income tax |
2008 |
Ecuador has identified a list of countries’ tax systems that are providing ‘preferential tax regimes’: transactions that are entered into after 2008, with taxpayers located in any of these ‘low tax’ countries or territories, will be considered a related-party transaction.
Read more |
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| Panama |
| Tax legislation adopted and regulatory update |
Tax Administration |
August 2012 |
Panama’s economic and finance department (Ministerio de Economía y Finanzas) issued resolutions providing rules on the use of specific fiscal equipment.
Read more |
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| Saint Lucia |
| Treaties |
Exchange of information |
20 July 2012 |
Canada and Saint Lucia signed an exchange of tax information agreement which entered into force on 20 July 2012.
Read more |
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| Uruguay |
| Tax legislation adopted and regulatory update |
Reporting requirements |
1 August 2012 |
Holders of bearer shares must be identified based on new reporting requirements which are effective as of 1 August 2012.
Read more |
| 3 August 2012 |
Transfers of investments in commercial business entities and agricultural partnerships and businesses must now be reported to the tax administration and the requirement to retain certain tax records during the period of limitations now also applies to commercial businesses, agricultural partnerships and businesses, bank trusts, investment funds, and civil associations.
Read more |
| Treaties |
DTT |
July 2012 |
Uruguay signed new income tax treaties with Ecuador, Liechtenstein, and Portugal in July 2012.
Read more |
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| USA |
| Tax legislation adopted and regulatory update |
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For legislative changes and regulatory updates for the US please visit
TaxNewsFlash US |
| FATCA |
2012 |
Draft forms for foreign financial institutions to register their FATCA status have been published for notice and comments.
Read more |
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| Venezuela |
| Other |
Other |
31 July 2012 |
Venezuela became a full member of Mercosur (the South American trade group comprised of Argentina, Brazil, Chile, Paraguay, and Uruguay) on 31 July 2012.
Read more |
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