18 April 2014
Americas Tax Center Weekly Roundup
Latest news — Americas
Chile proposes tax reform
On 1 April 2014, the Chilean Government sent a tax reform bill to the National Congress for discussion. The tax reform bill introduces a number of important amendments to the current tax laws and regulations, including increasing the corporate tax rate from 20% to 25% over a four-year period and making a number of changes to the international tax regulations. A Tax Alert has details.
Mexican Supreme Court issues decision on deductibility of pro-rata expenses
On 19 March 2014, the Mexican Supreme Court of Justice issued a ruling on the deductibility of expenses incurred on a pro-rata basis with nonresident taxpayers. The Supreme Court in effect ruled that the deductibility of pro-rata expenses turns on whether certain requirements are met, not whether those expenses were paid on a pro-rata basis to non-Mexican residents. Unlike other recent cases at lower court levels that focused on the deductibility of these expenses in a treaty or non-discrimination context, this ruling is on the law itself. A Tax Alert has details.
Mexican tax reform imposes upcoming action items and deadlines for IMMEX, Maquiladora companies
The Mexican tax reform of 2014 introduced several important changes for companies operating under the terms of the Decree for the Promotion of the Manufacturing, Maquiladora and Export Services Industry (IMMEX) and also for IMMEX companies that are considered as maquiladoras for income tax purposes. While the tax reform generally became effective on 1 January 2014, there are some transitory provisions applicable to IMMEX / maquiladora companies to be implemented under specific deadlines during 2014. A Tax Alert has details .
OECD issues new research and development incentive report
The OECD has issued a new report that provides an update on some of the available research and development (R&D) tax incentive schemes for OECD countries and selected economies. Specifically, the report contains information on the design, scope and approval processes of R&D tax incentive relief. A Tax Alert has details .
US FY 2015 budget proposals have implications for inbound investors
In March 2014, the Obama Administration released its fiscal year 2015 budget proposals with at least seven significant international tax proposals that would affect non-US multinational investors (Inbound Investors) in the US. Two of these proposals are new: (1) a proposal to restrict deductions for excessive interest of members of financial reporting groups, and (2) a proposal to restrict the use of hybrid arrangements that create stateless income. A Tax Alert has details.
Canada's proposed treaty shopping framework could affect private equity investments
In the Federal Budget tabled in February, the Canadian Government suggested certain measures it might implement to curtail "treaty shopping" by nonresidents investing in Canada and announced a new (second) round of consultations in relation to the proposed measures. These measures could affect private equity investments in Canadian real property, such as interests in oil and gas exploration and production companies. A Tax Alert has details .
Canadian Finance releases draft legislation for sales tax technical amendments
On 8 April 2014, the Canadian Department of Finance released for public comment draft legislative proposals and explanatory notes relating to technical changes to the Excise Tax Act and related regulations. Interested parties are invited to provide comments on the draft legislative proposals by 8 May 2014. A Tax Alert has details.
Canada’s TaxMatters@EY – April 2014 issue available
TaxMatters@EY, a monthly bulletin prepared by EY Canada, provides a summary of recent Canadian tax news, publications and resources. The April 2014 issue discusses: (1) tax questions to avoid costly implications when operating in the cloud, (2) an update on the Canada Revenue Agency's charity audits, and (3) how strategic investments can drive value for businesses.
This week's tax treaty news in the Americas
- Argentina and Mexico: tax treaty negotiations scheduled
- Brazil and France: French Senate approves social security agreement
- Canada and Peru: social security agreement signed
- Colombia and UK: UK announces plans to negotiate tax treaty
- Costa Rica and Mexico: tax treaty signed
- Mexico and Guernsey: tax treaty signed
- Mexico and Italy: tax treaty protocol approved
- Mexico and US: FATCA agreement signed and enters into force
- Trinidad and Tobago and UK: UK announces plans to negotiate revisions to tax treaty
This week's EY Global Tax Alerts
- Mexican tax reform of 2014 imposes upcoming action items and deadlines for IMMEX, Maquiladora companies (16 April 2014)
- French Tax Administration releases draft regulations on "anti-hybrid" financing provisions (16 April 2014)
- Belgian Tax Authority releases circular on Fairness Tax (14 April 2014)
- Mexican Supreme Court decision regarding non-deductibility of pro-rata expenses (14 April 2014)
- Hyderabad Tribunal rules on transfer pricing aspects of corporate guarantee (11 April 2014)
- OECD issues new R and D incentive report (10 April 2014)
- New French Premier announces tax and payroll stimulus package (10 April 2014)
- Chile proposes tax reform (10 April 2014)
- EU Court of Justice finds that US regulated investment companies cannot be excluded from benefits of Polish withholding tax exemption if Poland has sufficient means to verify comparability (10 April 2014)
- BorderCrossings: A Conversation with the Director of the US IRS Office of Transfer Pricing Operations (30 April)
In the next EY BorderCrossings webcast, US Internal Revenue Service (IRS) Office of Transfer Pricing Operations Director Sam Maruca will share the latest on IRS transfer pricing operations, including IRS goals, strategies and tactics in improving taxpayer upfront compliance and making IRS transfer pricing enforcement more effective. Register here.
Recently archived webcasts now available on-demand
- FATCA webcasts for US withholding agents, asset management organizations and US non-financial services companies
A series of recent webcasts looked at the final and temporary regulations providing further guidance under the Foreign Account Tax Compliance Act (FATCA) released by the US IRS and Treasury in February. The webcasts are now available on-demand.