6 December 2013
Americas Tax Center Weekly Roundup
Latest news — Americas
El Salvador's Supreme Court declares the Alternative Minimum Income Tax unconstitutional
On 15 November 2013, the Supreme Court of Justice of El Salvador (SCJ) ruled the alternative minimum income tax (AMT) statutory scheme unconstitutional. The SCJ determined that the AMT statutory scheme violated the constitutional principles of tax fairness and ability-to-pay by not allowing taxpayers to take any deductions on costs and expenses necessary to generate taxable income or to protect the source thereof. The SCJ’s ruling is final and cannot be appealed. A Tax Alert has details.
Association Agreement with European Union enters into force for Guatemala
The trade pillar of the Association Agreement between the European Union and Central America (i.e., Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) signed in June 2012 is now in force for Guatemala as of 1 December 2013. The Agreement is comprised of three interdependent and fundamental pillars: political dialogue, cooperation and trade. The trade pillar establishes a free trade area among both regions and is now in force for the whole region. A Tax Alert has details.
Uruguayan proposed bill would set consequences for failing to comply with bearer share identification requirement
A Tax Alert is now available on a Uruguayan bill proposed 28 October 2013 to resolve the problems that make it difficult for companies to comply with the identification of equity holders of bearer shares (established in Law No. 18,930). It also would punish corporations (Sociedades Anónimas) and companies limited by shares (Sociedades en comandita por acciones) that have not complied with the obligation to identify their shareholders.
US IRS proposes updated guidance on administration of Advance Pricing Agreements
On 22 November 2013, the US Internal Revenue Service (IRS) issued a proposed revenue procedure that would update and supersede previous guidance and instructions on Advance Pricing Agreements (APAs) and their administration. The proposed revenue procedure is intended to set forth in detail the procedural steps taxpayers must take to file a complete APA request. A Tax Alert highlights significant changes from the previous APA guidance.
US IRS proposes updates to procedures for competent authority assistance
On 22 November 2013 the US Internal Revenue Service (IRS) issued a proposed revenue procedure that when finalized would update and supersede its previous guidance for requesting assistance from the US competent authority acting through the Advanced Pricing and Mutual Agreement program (APMA) and the Treaty Assistance and Interpretation Team (TAIT). The intent of the proposed revenue procedure is to substantially improve clarity, readability and organization of the guidance. A Tax Alert has details.
Brazil's broad tax changes – what you need to know now! (13 December webcast)
On 12 November 2013, Brazil’s Executive Branch published Provisional Measure 627 containing a broad array of tax changes that will affect multinational companies doing business in Brazil as well as Brazilian multinationals with operations abroad. A webcast scheduled for 13 December will explain the changes. Access the registration link and more information under Upcoming webcasts below.
This week's tax treaty news in the Americas
- Argentina and Spain: tax treaty ratified
- Canada and Norway: social security agreement enters into force
- Cayman Islands and US: FATCA agreement signed
- Costa Rica and Mexico: tax treaty negotiations underway
- Costa Rica and US: FATCA agreement signed
- Dominican Republic and Spain: tax treaty ratified
- Ecuador and China: tax treaty approved by National Assembly of Ecuador
This week’s EY Global Tax Alerts
- Hong Kong introduces new court-free amalgamation ( 5 December 2013 )
- Spanish Supreme Court extends domestic tax credit to transfer of shares by EU residents ( 5 December 2013 )
- Spain implements EU CRD IV and provides for monetization of certain deferred tax assets ( 5 December 2013 )
- Italy increases 2013 and 2014 corporate income tax advance payments and imposes 2013 surcharge on financial service companies
( 5 December 2013 )
- India's Delhi High Court distinguishes copyright rights and copyrighted article in software transactions ( 4 December 2013 )
- Uruguay bill proposes consequences for failing to comply with bearer shares identification requirement (4 December 2013)
- Denmark presents draft bill on dividend taxation of cash payments related to restructurings (4 December 2013)
- Turkish Revenue Authority's rulings provide guidance on IT related transactions (4 December 2013)
- Japan reduces corporate tax rate (3 December 2013)
- Ghana issues 2014 Budget (3 December 2013)
- French Government proposes anti-hybrid provision (3 December 2013)
- Association Agreement with European Union enters into force for Guatemala (3 December 2013)
- German Federal Fiscal Court rules on S corporation treaty protection under 2006 German-US tax treaty (2 December 2013)
- Coalition agreement indicates future German tax policy priorities (27 November 2013)
- IRS proposes updates to procedures for competent authority assistance (27 November 2013)
- Nigerian High Court orders disbandment of Tax Tribunal and affirms deductibility of recharges under the deemed profit regime (27 November 2013)
- IRS issues proposed revenue procedure on administration of Advance Pricing Agreements (26 November 2013)
- Mauritius releases 2014 Budget (26 November 2013)
- Dutch State Secretary of Finance publishes Decree on transfer pricing and application of arms length principle (26 November 2013)
- European Commission proposes amendments to Parent-Subsidiary Directive by introducing anti-hybrid clause and general anti-abuse provision (26 November 2013)
- Kenya enacts Finance Bill 2013 (25 November 2013)
- Hungarian Parliament approves 2014 tax amendments (25 November 2013)
- Israel moves forward with CFC amendments and cancels personal income tax rate increase (25 November 2013)
- El Salvador's Supreme Court declares the Alternative Minimum Income Tax unconstitutional (22 November 2013)
- US Senate Finance Committee Chairman Baucus releases international tax reform discussion draft (22 November 2013)
- Slovakia proposes changes to tax law (21 November 2013)
- Romania's full participation exemption regime becomes effective 1 January 2014 (21 November 2013)
Upcoming EY webcasts
- Business tax services: global tax update (12 December)
Looking to gain insight on recent global tax trends and developments impacting your organization? Then join our panel as we discuss key issues, such as: (1) tax policy and controversy trends and developments, (2) research and development credits and incentives, and (3) fixed and capital asset matters, including the recently issued Tangible Property Regulations in the US. This webcast will be of interest to tax professionals, tax directors and chief financial officers. Register here.
- Brazil's broad tax changes – what you need to know now! (13 December)
On 12 November 2013, Brazil’s Executive Branch published Provisional Measure 627 containing a broad array of tax changes that will affect multinational companies doing business in Brazil as well as Brazilian multinationals with operations abroad. Taxpayers will need to decide – possibly as early as within the next three months – whether to adopt the sweeping changes for fiscal year 2014, based on their specific facts and circumstances. An upcoming webcast will discuss the new tax rules and the circumstances where the early adoption of the newly issued tax rules may be beneficial. Register here.
Recently archived webcasts now available on-demand
- Put Mexico, Ireland and Spain tax issues on your radar screen
In a recent International tax talk webcast, the EY Global Tax Desk team focused on the significant Mexico tax reforms and the latest tax regime developments in Ireland and Spain. These countries’ political and regulatory proposals and actions have wide ranging implications for multinationals. Understanding the implications is of critical importance for all tax professionals with responsibilities for or interest in these countries. Watch the webcast on-demand here.