14 June 2013

Americas Tax Center Weekly Roundup

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Latest news — Americas

Brazil amends Financial and Exchange Transactions Tax

Brazilian Federal Decree 8,023, issued on 4 June 2013, establishes some changes to the taxation of foreign investments in Brazil. According to the Decree, investments made by nonresidents in fixed income instruments in the Brazilian financial and capital markets that were formerly subject to the Financial and Exchange Transactions Tax (IOF or Imposto sobre Operacoes Financeiras) at a 6% rate are, as of 4 June 2013, are subject to IOF at a 0% rate. This change also applies to remittances aiming to fund margin accounts (usually required by organized exchanges). This change also applies to investments made under Resolution n. 2,689. This IOF rate reduction does not eliminate the 6% rate imposed on loans contracted abroad whenever the average maturity of the loan contract is less than one year.  For more information on this development please contact: Felipe Aquino  (ph: +55-11-2573-3437) or Pedro Custodio  (ph: +55-11-2573-3035)

US IRS rules Mexican Land Trust arrangement is not a trust for US tax purposes

The Mexican Federal Constitution prohibits non-Mexican persons from directly holding title to residential real property in certain areas (restricted zones) of Mexico. However, non-Mexican persons may hold title to residential real property in restricted zones through a Mexican Land Trust (MLT) with a Mexican bank. In a recent ruling, the US Internal Revenue Service has ruled that MLTs are not trusts for US tax purposes. Accordingly, information return requirements for US holders of foreign trusts do not apply.

Ernst & Young,S.A. (Costa Rica) transfer pricing conference to be held on 21 June

EY is hosting a Costa Rican transfer pricing conference on 21 June at the Hotel Crown Plaza Corobici. Various EY speakers will discuss the background of the transfer pricing rules, a practical analysis of their methods, and potential opportunities and risks. View the invitation (in Spanish) here.

Ernst & Young LLP (Canada) discusses tax issues for family businesses and other hot topics

TaxMatters@EY, a monthly bulletin prepared by EY Canada, provides a summary of recent Canadian tax news, publications and resources. The latest edition discusses important tax issues for family businesses, the Canada Revenue Agency’s revised provincial allocation of income policies in respect of taxable benefits and public warehouses, tax issues in the new digital environment, the outlook for global tax policy in 2013, and a recent Federal Court of Appeal decision on the definition of "active business."

Renewable energy country attractiveness index — latest update now available

Established in 2003, EY’s global quarterly publication, Renewable energy country attractiveness index (RECAI), ranks 40 countries on the attractiveness of their renewable energy investment and deployment opportunities, based on a number of macro, energy market and technology-specific indicators. The 10-year anniversary issue sees the US regaining the top spot, while South America leaves Europe behind.

Ernst & Young LLP International Tax podcasts available

The US firm regularly records podcasts on important US and global international tax developments. Two types of international tax podcasts are available: weekly Cross-border Taxation podcasts and the monthly Washington Dispatch podcast. Click here to Subscribe to the Cross-border podcast series on iTunes in the Apple store. Click here to Subscribe to the monthly Washington Dispatch podcast series on iTunes. You may also listen to the podcasts directly from the EY Thought Center webcast page on ey.com (click "Podcasts" on the left side navigator).

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