21 March 2014

Americas Tax Center Weekly Roundup

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Latest news — Americas


OECD releases discussion drafts on treaty abuse and hybrid mismatch arrangements

The OECD is moving very quickly on its Base Erosion and Profit Shifting (BEPS) agenda, a matter of major importance to multinationals. The OECD's recommendations are ultimately expected to result in tax legislation worldwide and are being followed and commented upon by taxpayers and practitioners globally. The OECD released a treaty abuse discussion draft on 14 March 2014, and a hybrid mismatch arrangements discussion draft on 19 March 2014. An OECD digital economy discussion draft is planned for 24 March 2014.

Chile issues instructions on modifications included in Law 20.630 on international taxation

On 11 March 2014, the Chilean Internal Revenue service issued Circular N° 14, which contains instructions on the modifications included in Law 20.630 on international taxation. Law 20.630 modified several tax provisions, including a permanent increase in the Chilean First Category Tax, a new tax on indirect transfers of Chilean underlying assets, worldwide-source taxation for branches and permanent establishments of foreigners operating in Chile, and a withholding tax exemption for payments abroad related to standard software. A Tax Alert has details.

Brazil issues Normative Instruction dealing with withholding tax on transactions between Brazilian residents and nonresidents

Brazilian Federal Tax Authorities (RFB) published Normative Instruction 1,455 (NI 1,455) on 7 March 2014, dealing with withholding tax on different types of income resulting from cross-border payments made to nonresidents. Although NI 1,455 supersedes previous regulations on the subject (Normative Instruction 252/2002 - NI 252), it does not introduce significant changes to the prior rules. A Tax Alert covers the most significant changes made by NI 1,455.

Guatemala confirms transfer pricing compliance for 2013

On 11 March 2014, the Guatemalan Tax Administration (Superintendencia de Administración Tributaria, a.k.a. SAT) issued an announcement in the Publinews gazette affirming the obligation for taxpayers to comply with the transfer pricing regulations for the 1 January 2013 to 20 December 2013 period. This clarifies the requirements in the wake of the issuance of Decree 19-2013 on 20 December 2013 in which transfer pricing regulations were postponed in Guatemala to become effective as of 1 January 2015. A Tax Alert has details.

Spanish High Court rules Brazilian juros qualify for participation exemption

The Spanish National Court issued a resolution on 27 February 2014, declaring that income received by a Spanish entity from its Brazilian subsidiary in the form of interest on net equity payments (juros sobre o capital proprio -JsCP-) can benefit from the Spanish participation exemption regime. This landmark case affects many Spanish multinationals (and foreign entities holding Brazilian interests through Spanish entities), as it may have a direct and significant impact in the effective tax rate of profit repatriations made from Brazil to Spain. A Tax Alert has details.

FATCA: Are you ready for 1 July 2014?

EY has published a series of multi-lingual insights into the potential impact of FATCA on non-financial companies. Available now via ey.com is a short animation in seven languages (Spanish, Dutch, English, French, German, Japanese and Mandarin) plus a more detailed podcast. Click here to go to the page and select your language.

New EY guide for foreign investments in certain US oil and gas assets

A new EY investment guide has been structured to help non-US investors broadly evaluate certain investments in US oil and gas assets. The guide summarizes the US Foreign Investment in Real Property Tax Act (FIRPTA) and its application to certain US oil and gas investments. It also provides a backdrop to certain investments that are commonly employed in today's market. It covers various oil and gas subsectors and identifies a variety of investment considerations designed to help non-US investors.

This week's tax treaty news in the Americas

  • Argentina and Switzerland: tax treaty signed
  • Brazil and Norway: tax treaty protocol signed
  • Ecuador and China: tax treaty enters into force

This week's EY Global Tax Alerts

Upcoming webcasts

  • International tax reform developments and outlook (26 March)
    Our next BorderCrossings webcast will share information and insights on international tax reform proposals in the US, and how the OECD's Base Erosion and Profit Shifting (BEPS) project is changing the global international tax policy landscape. Join us to learn how these proposals may affect your global tax position in the years ahead. Register here.

Recently archived webcasts now available on-demand

  • Energy reform in Mexico
    The recent Mexican tax reform will have major impacts on oil and gas companies looking to operate in and with Mexico. A recent webcast discussed: (1) Mexican energy and fiscal reforms and what these mean for the sector, (2) the Mexican business environment versus other energy hubs, (3) a transactional and tax overview for operating in Mexico, and (4) opportunities and issues for oil and gas industry participants. Watch it on-demand here.

International tax talk quarterly series with the EY Global Tax Desk Network

The first Global Tax Desk webcast of 2014 focused on recent UK and Switzerland tax proposals, as well as developments from Israel and Italy – all of importance to multinationals operating in those jurisdictions.Watch it on-demand here.