7 March 2014
Americas Tax Center Weekly Roundup
Latest news — Americas
US President releases FY 2015 budget, tax proposals
On 4 March 2014, President Obama released his FY 2015 budget which includes new international tax revenue-raising proposals aimed at offsetting the cost of other Administration priorities. Some of the new proposals appear to reflect initiatives that are in line with the tax policy work being done by a number of countries as part of the OECD Base Erosion and Profit Shifting (BEPS) project. The budget also renews the call for business tax reform. A Tax Alert has details.
Colombia modifies transfer pricing regulations
Colombia has modified its transfer pricing regulations in accordance with Law 1607, enacted in December 2012, which included reforms to the transfer pricing rules. The new regulations specify which transactions will be treated as creating an economic link and establish conditions for determining whether a taxpayer must comply with transfer pricing obligations in Colombia. The rules also address financing transactions, acquisitions and transfer pricing analysis. A Tax Alert has details.
Peru ratifies tax treaties with Switzerland and Korea
On 1 March 2014, the ratification of the tax treaty with Switzerland by the Peruvian President was published in the Official Gazette. The tax treaty will be effective 1 January 2015. In addition, on 27 February 2014, the ratification of the tax treaty with Korea by the Peruvian President was published in the Official Gazette. The Korean tax treaty will also be effective on 1 January 2015. A Tax Alert has details.
El Salvador introduces changes in transfer pricing information return
El Salvador modified its transfer pricing information return (F-982 V3), effective 5 February 2014. The modified return includes a new section in which the taxpayer must provide information relating to transfer pricing documentation. Specifically, taxpayers must: (1) describe the type of transfer pricing documentation prepared, (2) indicate if such documentation is in a transfer pricing documentation study or if it has been prepared according to Administrative Guideline No. DG-001/2012, and (3) state whether such documentation has been prepared by the taxpayer or a third party. A Tax Alert has details.
US Ways and Means Committee Chairman reformulates international tax reform proposals
On 26 February 2014, US House Ways and Means Committee Chairman Dave Camp (R-MI) released a long-awaited comprehensive tax reform discussion draft. The international tax provisions of the proposal would establish a dividend exemption system, modify the foreign tax credit system, substantially modify the Subpart F rules, address base erosion and make targeted modifications to the taxation of foreign persons. A new Tax Alert focuses on the proposed changes to the international tax provisions that would affect US multinational corporations and inbound investors to the United States.
US holds hearing on proposed income tax treaties, including US-Chile treaty
On 26 February 2014, the US Senate Foreign Relations Committee held a hearing regarding five proposed income tax treaties and protocols, including considering for the first time the proposed US-Chile Income Tax Treaty and Protocol (which the two countries had signed on 4 February 2010) and a protocol to amend the Convention on Mutual Administrative Assistance in Tax Matters (signed on 27 May 2010). In connection with the hearing, the US Treasury Department released its Technical Explanation of the Chile Treaty and the Multilateral Convention. A Tax Alert has details.
Canada Revenue Agency announces Form T1135 transitional relief for 2013
On 26 February 2014, the Canada Revenue Agency announced new transitional relief for Canadians who must comply with the more detailed Form T1135 information reporting requirements for foreign property with a cost of over $100,000. The transitional relief, which applies only for the 2013 taxation year, is intended to assist taxpayers in transitioning to the more onerous reporting requirements, and responds to concerns raised by taxpayers and various stakeholders. A Tax Alert has details.
Canadian federal budget impacts GST/HST election for closely related persons
The Canadian federal budget, tabled 11 February 2014, proposes a number of changes to the "nil consideration" election that is currently available to relieve the goods and services tax / harmonized sales tax (GST/HST) that would otherwise apply to certain transactions between members of a closely related group (generally a group with common ownership of at least 90%). Subject to certain exceptions, these changes will take effect for elections made on or after 1 January 2015 and will apply to supplies made between parties to such an election on or after that date. A Tax Alert has details.
This week's tax treaty news in the Americas
- Barbados and US: negotiations underway on FATCA agreement
- Chile and US: FATCA agreement signed
- Chile and US: tax treaty submitted to Chilean Congress
- US and India: negotiations underway on tax treaty protocol
- US and Moldova: intentions expressed to negotiate tax treaty
This week’s EY Global Tax Alerts
- Peru ratifies tax treaties with Korea and Switzerland (5 March 2014)
- Update on the new South Africa rules for e-services (5 March 2014)
- Russian Arbitration Court confirms Form 6166 provides sufficient support for US company’s entitlement to treaty benefits (4 March 2014)
- Italian Tax Authorities clarify application of the VAT exemption for Milan Expo 2015 (4 March 2014)
- Russia identifies steps to improve competitiveness of the Russian tax system within six years (4 March 2014)
- Taiwan issues retroactive amendments to exempt from withholding tax royalties paid on qualified patent rights registered outside Taiwan (3 March 2014)
- Colombia modifies transfer pricing regulations (3 March 2014)
- US Senate Foreign Relations Committee holds hearing on proposed income tax treaties and protocols, including proposed US - Chile Treaty (3 March 2014)
- Country by country reporting is currently off the EU agenda until 2018 (28 February 2014)
- ECJ issues decision on Spanish Tax on Retail Sale of Certain Hydrocarbons (28 February 2014)
- South Africa aligns secondary transfer pricing adjustment with international standards (28 February 2014)
- Spanish Tax Authorities issue ruling increasing eligibility to participate in Spanish REIT regime (28 February 2014 )
- Namibia presents 2014 Budget (28 February 2014)
- EU Advocate General holds Dutch fiscal unity regime contrary to EU law (28 February 2014)
- El Salvador introduces changes in transfer pricing information return (27 February 2014)
- Highlights of Chairman Camp’s tax reform discussion draft (27 February 2014)
- Proposed and temporary regulations under FATCA: what they mean to your business (11 March)
On 20 February 2014, the US IRS and Treasury released proposed and temporary regulations providing further guidance under the Foreign Account Tax Compliance Act (FATCA) and "conforming" the requirements in the backup withholding/Form 1099 and section 1441/Form 1042-S rules with FATCA. An upcoming webcast will discuss the impact of these provisions on both US withholding agents and foreign financial institutions. Register here.
- Business Tax Services: Global Tax Update Q1 2014 (12 March)
An upcoming webcast will share insights and experiences on recent global tax developments and trends and the outlook for tax policies in 2014, including: (1) the OECD BEPS project and recent country-by-country reporting template, (2) US House Ways and Means Committee Chairman Camp’s tax reform discussion draft, (3) procedural guidance and leading practices in relation to the recently issued US Tangible Property Regulations, and (4) EY’s 2014 tax risk and controversy survey results, plus recent news from the US IRS and other tax authorities. Register here.
- Impact of new FATCA provisions on asset management (20 March)
On 20 February 2014, the US IRS and Treasury released final and temporary regulations providing further guidance under the Foreign Account Tax Compliance Act (FATCA) and "conforming" the requirements for withholding of tax on certain US source income paid to foreign persons, information reporting and backup withholding on payments made to certain US persons, and portfolio interest treatment with FATCA. An upcoming webcast will discuss the impact of these provisions on asset management organizations. Register here.
Recently archived webcast now available on-demand
- Managing research and development (R&D) incentives
R&D incentives are an increasingly important element of tax policy and have grown in breadth and scope in recent years. A recent webcast discussed how managing grants and incentives on a global scale can help organizations realize the opportunities available under the law to increase their return on investment. In addition, the webcast covered current R&D trends and developments and the leading incentive management practices employed by companies. Watch it on-demand here.
- OECD BEPS Action Plan: Update and outlook
A recent webcast examined the OECD’s progress in relation to its BEPS Action Plan and the implications for multinational businesses and also looked at BEPS-related developments around the globe. Areas of focus included the latest activity with respect to the country-by-country reporting template, hybrid mismatch arrangements, treaty abuse and the digital economy. Watch it on-demand here.