28 June 2013

Americas Tax Center Weekly Roundup

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Latest news — Americas

Mexico requests to join Pilot Multilateral Automatic Information Exchange Facility of five EU member states

Mexico requested on 11 June 2013 to participate in the Pilot Multilateral Automatic Information Exchange Facility (Pilot Facility) of five European Union (EU) member states. Mexico would be the first non-European country to take part in this initiative, which was established on 9 April 2013 by the five largest economies in the EU: France, Germany, Italy, Spain and the UK. The official statement of the Ministry of Finance of Mexico establishes that its intention in joining the Pilot Facility is to fight tax fraud and evasion and to strengthen its treaty network. A Tax Alert has details.

Brazil-US Tax Information Exchange Agreement is effective

Brazil’s President Dilma Rouseff enacted Decree 8003/13 on 16 May 2013, which made effective the Brazil-US Tax Information Exchange Agreement negotiated in 2007. Under this agreement, Brazil and the US will be obliged to exchange tax information as per request of the other country. Brazil and the US do not have a double tax treaty, so this agreement obligates only the exchange of information and administrative assistance. A Tax Alert has details.

Long-awaited Canadian omnibus technical bill (C-48) is enacted

On 26 June 2013, after some of its measures had been outstanding for more than a decade, Bill C-48, Technical Tax Amendments Act 2012, received Royal Assent. Bill C-48, containing nearly 1,000 pages of income tax provisions, implements all the measures tabled in the House of Commons from the 24 October 2012 omnibus notice of ways and means motion. No amendments to the bill have been made since the bill received first reading on 21 November 2012. Bill C-48, which became substantively enacted on 21 November 2012 for IFRS reporting purposes, is enacted as of 26 June for US GAAP reporting purposes. A Tax Alert has details.

Puerto Rican House of Representatives approves substitute bill to balance 2014 budget

After much debate and opposition to some of the tax changes originally proposed in House Bill 1073, the Puerto Rican House of Representatives issued a substitute bill (Substitute Bill 1073 or the Bill) that is pending approval. The Bill, which is part of the tax measures to be approved as part of the government’s budget for fiscal year 2014, is expected to be approved because it was prepared as a coordinated effort between the executive branch and the legislature. The Bill includes major changes principally related to sales and use and income taxes. Additional changes in the Senate’s evaluation of the Bill are expected.

Costa Rican tax authorities issue new rules on tax credits under Sales Tax Law

Costa Rican tax authorities have issued a resolution regulating the computation of tax credits under the recently amended Article 14 of the Sales Tax Law. The resolution entered into force on 30 May 2013. The resolution restates the list of paid sales tax for which taxpayers are entitled to take a credit, but restricts the taxes paid in the purchase of other goods and merchandise to those "directly used in the production, sales and distribution phases of the final products sold to customers."

New reporting requirements for Canadians with offshore property and income

On 25 June 2013, the Canada Revenue Agency (CRA) announced the launch of a strengthened Foreign Income Verification Statement (Form T1135). For 2013 and later tax years, Canadians who hold foreign property with a cost of over $100,000 will be required to provide additional information to the CRA. The criteria for those who must file Form T1135 have not changed; however, the new form has been revised to include more detailed information on each specified foreign property. A Tax Alert has details.

Latest barometer report on Brazil finds it ready for growth

Our eighth Capital Confidence Barometer finds Brazilian executives re-evaluating local economic prospects amid decreased local economic growth projections and increased concern around inflation. However, growing domestic demand, government-supported growth measures and continued global investment, alongside growing confidence in the global economy, has helped sustain overall boardroom optimism. This rising confidence is reflected in an increased willingness to engage in inorganic growth, and increasing confidence in strategic deal-making and deal-making fundamentals.

This week's Global Tax Alerts