15 November 2013
Americas Tax Center Weekly Roundup
Latest news — Americas
Brazil publishes Provision Measure 627; major corporate tax implications
On 12 November 2013, the Brazilian Government published Provisional Measure no 627, containing long-awaited rules that permanently align the Brazilian tax system to the currently in force accounting rules in Law 11,638/2007. Tax harmonization with IFRS may result in a substantial increase in the effective corporate tax rate for many companies, mainly as it relates to the treatment of goodwill.
PM 627 also includes new tax rules on the treatment of foreign profits accrued abroad by legal entities and individuals resident or domiciled in Brazil. This is an attempt by the government to reduce litigation and increase legal security for Brazilian investors doing business abroad. A Tax Alert is pending.
OECD holds public consultation on BEPS-related reporting and transfer pricing issues
The OECD on 12-13 November 2013 held a public consultation on several ongoing projects related to its Action Plan on Base Erosion and Profit Shifting (BEPS). The meeting focused first on the proposal for a common template for country-by-country reporting of high-level information to tax authorities and the proposal for a common two-tier approach to transfer pricing documentation. The discussion then turned to an in-depth discussion of transfer pricing aspects of intangibles. These are projects that the OECD has targeted in the BEPS Action Plan for completion by September 2014. A tax Alert provides details.
Brazilian IRS standardizes corporate tax, Pis/Cofins interpretation for shared services
Due to the latest federal administrative case law and contrasting private rulings issued by different sectors across Brazil, the General Coordination of Taxation (COSIT) issued an administrative ruling advising taxpayers and tax auditors on the Corporate Income Tax (CIT) and Pis/Cofins rules applicable to shared services costs and expense apportionment. The ruling standardizes the Brazilian IRS interpretation of CIT and Pis/Cofins rules applicable for shared services reimbursement. A Tax Alert has details.
Argentina tax treaty developments with Spain and Switzerland
The new tax treaty between Argentina and Spain, which was recently approved by the Spanish Congress, has been approved by the relevant commissions of the Argentine Congress. As a result, the treaty will be voted on in the next session. In addition, on 5 November 2013, Argentina and Switzerland initialed a tax treaty, which will replace the previous convention that was abrogated in 2012. A Tax Alert has details.
Uruguay repeals capital gains tax exemption on transfer of bearer shares
Article 364 of Law No. 19,149, dated 24 October 2013, eliminates the capital gains tax exemption on the transfer of bearer shares issued by Uruguayan companies. At present, this exemption applies only if the transfer is performed by nonresidents or Uruguayan tax resident individuals. From 1 January 2014, the transfer of bearer shares by nonresidents or Uruguayan tax resident individuals will be subject to a capital gains tax rate of 12% on a deemed profit of 20% of their sale price (which should correspond to the fair market value). A Tax Alert is available.
Panama extends due date for Transfer Pricing Information Return
Panama has extended the due date for filing Form 930, Transfer Pricing Information Return, from 30 June 2013 to 31 December 2013, for taxpayers whose fiscal year ended 31 December 2012. Section 762-I of the Panamanian Tax Code establishes the obligation for taxpayers to file, during the six months following the end of the taxpayer’s fiscal year, an information return on the cross-border transactions conducted with related parties. This Resolution extending the due date is effective 21 October 2013. A Tax Alert is available.
EY Business Tax Services launches Global R&D Guide
The new Worldwide R&D incentives reference guide delivers an overview of the research and development (R&D) incentive regimes in 34 countries. For each country, the guide offers a description of available benefits, the incentive application process, eligibility and intellectual property jurisdictional requirements. Where available, patent and innovation boxes are also described. The guide can be found in the Global Tax Guides section of ey.com and will soon be incorporated into our Global Tax Guides app. Access also the supporting materials.
Global Tax Policy and Controversy Briefing – latest issue and new external microsite now available
Issue 13 of EY’s Global Tax Policy & Controversy Quarterly Briefing is now available for sharing with clients. This newest edition provides coverage of the latest meeting between OECD and business on the Base erosion and profit shifting (BEPS) action plan, as well as detailed updates from the recent G20 meeting. In addition to the availability of our Quarterly Briefing, a new external Tax Policy & Controversy Briefing microsite is now available to all users of EY.com. The Briefing microsite provides access to all TPC-related articles and interviews as soon as they are available, and also allows readers to view other related articles and Tax Alerts.
This week's tax treaty news in the Americas
- Canada and Honduras: free trade agreement signed
- Ecuador and Korea: tax treaty details now available
This week’s EY Global Tax Alerts
- Nigeria sets up Transfer Pricing Division and publishes transfer pricing forms (12 November 2013)
- Poland's lower house of Parliament approves bill amending CIT law (11 November 2013)
- Italy issues guidance on tax consequences of corrections of prior years' accrual errors (11 November 2013)
- Turkey provides corporate income tax exemption on certain services (8 November 2013)
- Norway's new Government issues amendments to 2014 Budget (8 November 2013)
- US IRS rules on effect of Section 302(a) redemption on post-1986 E&P and foreign income tax pools (8 November 2013)
- Puerto Rico's Treasury Department issues procedures for requesting waivers from new AMT components (7 November 2013)
- Australia issues plan for tax announcements backlog (7 November 2013)
- US IRS issues additional guidance regarding FATCA (6 November 2013)
- India's CBDT identifies Cyprus as Notified Jurisdictional Area (6 November 2013)
Upcoming EY webcasts
- Transfer pricing controversy in India and China – how different is it? (21 November)
Many US and Canadian multinational companies have transactions with related parties in India and/or China, where they face transfer pricing enforcement regimes and controversy procedures that differ substantially from those in North America. An upcoming webcast will provide background on the Indian and Chinese transfer pricing regimes, including any unusual aspects of their transfer pricing rules, as well as transfer pricing audits, significant court cases, and information on their mutual agreement procedure (MAP) and advance pricing agreement (APA) programs. Register here
- Your talent in motion: Global mobility effectiveness survey 2013 (5 December)
Global organizations now deploy their talent around the world, around the clock – in structured assignments, in flexible work patterns, in ad hoc business travel and in short-term crisis management roles. This webcast will examine how the individuals in the global talent pool, and the organizations they work for, can both benefit from effective practices in the management of global mobility. Register here
Recently archived webcasts now available on-demand
- Managing risk in the US and Canada – EY’s 2013 global transfer pricing survey
EY’s 2013 global transfer pricing survey reveals companies are placing a higher priority on managing risk associated with transfer pricing in reaction to heightened scrutiny by tax authorities. A recent webcast discussed the survey results with a focus on the US and Canadian implications of: (1) the increased taxpayer focus on risk management, (2) how taxpayers implement and document their transfer pricing policies, (3) key trends in controversy concerns, and (4) taxpayers’ experiences in resolving transfer pricing disputes. Watch it on-demand here