4 April 2014
Americas Tax Center Weekly Roundup
Latest news — Americas
US FATCA relief treats additional jurisdictions as having IGAs in effect, extends FFI registration deadline
The US Internal Revenue Service (IRS) has announced relief to address concerns about uncertainty with regards to pending intergovernmental agreements (IGAs) with respect to the Foreign Account Tax Compliance Act (FATCA), given the looming 1 July 2014 implementation start date. Specifically, the IRS announced that it will treat certain IGAs that have been agreed to in substance, but not yet signed, as being in effect as of 2 April 2014. In addition, the IRS is extending the deadline for Foreign Financial Institutions (FFIs) to register on the FATCA website. A Tax Alert has details.
Numerous countries commit to early adoption of OECD's Common Reporting Standard Statement
On 19 March, 34 countries – including Argentina, Colombia and Mexico – issued a joint statement committing to the early adoption of the OECD’s new standard for the automatic exchange of information between tax authorities, also known as the Common Reporting Standard (CRS). The joint statement recognizes tax evasion as a global problem requiring a global solution, and welcomes the CRS as way to tackle cross-border tax evasion. A Tax Alert has details.
Dominican Republic modifies transfer pricing regulations
The Dominican Republic will publish Executive Decree No. 78-14 in the next few days, which will make changes to the transfer pricing regulations. In general, the Decree implements the modifications made by Law No. 253-12, enacted on 9 November 2012. The new provisions apply to both cross-border and domestic intercompany transactions performed by Dominican taxpayers, and will be enforced retroactively affecting fiscal years ended 31 December 2013 and onwards. A Tax Alert discusses the Decree’s key provisions.
OECD tentatively announces simplifications to country-by-country reporting during webcast
On 2 April 2014, the OECD hosted its second webcast on the Base Erosion and Profit Shifting (BEPS) project. A replay and the slides for the webcast can be found on the OECD website. The most significant discussion related to Action 13 on Transfer Pricing Documentation and country-by-country reporting, where a tentative decision was announced to make significant simplifications to the Country by Country Reporting template. A Tax Alert has details.
New anti-base erosion and anti-inversion international tax proposals included in US fiscal year 2015 Budget
On 4 March 2014, US President Obama’s administration released its fiscal year 2015 Budget proposals. The international tax proposals in the budget would represent dramatic changes in key elements of the US international tax regime. Several of the new international tax proposals are aimed at addressing tax base erosion concerns that are similar to the concerns that are the target of the OECD’s base erosion and profit shifting (BEPS) project, particularly those proposals addressing hybrid entities and arrangements and the digital economy. A Tax Alert has details.
OECD invites public comments on transfer pricing comparability data and developing countries
On 11 March 2014, the OECD released a discussion paper on Transfer Pricing Comparability Data and Developing Countries. The paper addresses concerns frequently expressed by developing countries about the availability and quality of financial data needed for application of the arm’s length principle. The paper explores four possible approaches the OECD may adopt to address the concerns expressed by both OECD and non-OECD countries with respect to the availability and quality of comparability data. A Tax Alert has details.
Argentina and Switzerland sign new tax treaty
On 20 March 2014, Argentina and Switzerland signed a new tax treaty that provides for reduced withholding rates on dividends, interest, royalties and capital gains. The treaty still needs to be ratified according to the legislation of the respective countries and the notification instruments need to be exchanged for its entrance into force. A Tax Alert has details.
US IRS issues annual APA report for 2013
The US Internal Revenue Service (IRS) issued the 15th annual Advance Pricing Agreement (APA) report on 27 March 2014. The Report provides an updated discussion of the APA program, including its activities and structure for calendar year 2013, gives useful insights into the operation of the program and indicates some of the treatment and processes that companies applying for an APA can expect to encounter. A Tax Alert has details.
Canadian Newfoundland and Labrador 2014-15 provincial budget tabled
Newfoundland and Labrador Finance Minister Charlene Johnson tabled the Canadian province’s fiscal 2014–15 budget on 27 March 2014. The budget contains several tax measures affecting individuals and corporations. A Tax Alert has details.
This week's tax treaty news in the Americas
- Canada and Cameroon: foreign investment protection and promotion agreement signed
- Canada and South Korea: free trade agreement negotiations concluded
- Honduras and US: FATCA agreement signed
- US and Chile: tax treaty approved by US Senate Foreign Relations Committee
- US and Hungary: tax treaty approved by US Senate Foreign Relations Committee
- US and Luxembourg: tax treaty protocol approved by US Senate Foreign Relations Committee
- US and OECD: protocol to Convention on Mutual Administrative Assistance in Tax Matters approved by US Senate Foreign Relations Committee
- US and Switzerland: tax treaty protocol approved by US Senate Foreign Relations Committee
This week's EY Global Tax Alerts
- South African Revenue Service issues draft notice of additional reportable arrangements (2 April 2014)
- Russian Appeals Court holds thin capitalization rules should apply to loan from foreign sister company (2 April 2014)
- OECD hosts second webcast update on BEPS project (2 April 2014)
- Spanish National High Court denies tax deductibility of the amortization of financial goodwill derived from indirect acquisitions (1 April 2014)
- Delhi Tribunal rules technical assistance constituted Service PE and related fees were effectively connected business profits (1 April 2014)
- Hong Kong enacts 8.25 percent tax rate for captive insurers (31 March 2014)
- US Administration’s fiscal year 2015 Budget includes new anti-base erosion and anti-inversion international tax proposals (31 March 2014)
- Double Tax Treaty between Luxembourg and Laos enters into force (31 March 2014)
- US IRS issues annual APA report for 2013 (31 March 2014)
- Numerous countries commit to early adoption of OECD’s Common Reporting Standard Statement (31 March 2014)
- Russia publishes Controlled Foreign Companies Bill (28 March 2014)
- OECD invites public comments on the paper on Transfer Pricing Comparability Data and Developing Countries (28 March 2014)
- US IRS issues Guidance on taxation of "convertible" virtual currencies such as Bitcoin (28 March 2014)
- Argentina, Switzerland sign new tax treaty (27 March 2014)
- An update on legislative initiatives for "de-offshorization" of the Russian economy (27 March 2014)
- Canadian nonresident trust rules require notice of relieving elections by 31 March or 25 June 2014 (27 March 2014)
- Australia releases discussion paper regarding debt-equity tax classification rules (27 March 2014)
- Panama amends reporting requirements for monthly Purchase and Non-Taxpayer Reports (27 March 2014)
Global trade management: how high performers are accelerating ahead (17 April)
EY recently asked a group of industry professionals overseeing high-performing global trade departments to provide views on characteristics and processes common to high performance. The findings, reported in an EY Global Trade Symposium report, provide insights from these industry leaders into how effective trade management can enable corporate growth and competitive success. Learn more in the upcoming webcast.
Recently archived webcasts now available on-demand
Business Tax Services: Global Tax Update Q1 2014
A recent webcast shared 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) the US Camp tax reform discussion draft, (3) the recently-issued US Tangible Property Regulations, and (4) EY’s 2014 tax risk and controversy survey results. Watch it on-demand here.
EY industry, service and issue publications
Oil and Gas
- Financial Reporting Briefs: Oil and Gas - March 2014