23 August 2013
Americas Tax Center Weekly Roundup
Latest news — Americas
Canada proposes changes to foreign affiliate dumping rules
On 16 August 2013, the Canadian government proposed draft legislation to introduce a number of revisions to the foreign affiliate dumping rules that were first announced as part of the 2012 federal budget and enacted on 14 December 2012 pursuant to Bill C-45. These revisions reflect certain lingering concerns that were raised during consultations on the various versions of the proposals before and even after enactment. This consultation process continues, in that interested parties are invited to provide comments on the draft legislation by 15 October 2013. A Tax Alert has details.
Panama and UK sign Double Taxation Convention
Panama and the UK signed a Convention for the Avoidance of Double Taxation on 29 July 2013. The Treaty is a hybrid of the OECD Model Double Taxation Convention and the UN model treaty. The Treaty also includes an exchange of information clause that follows the standards developed in the OECD and UN models. A Tax Alert discusses the most important provisions.
Canada Revenue Agency releases report on Mutual Agreement Procedure program
On 8 August 2013, the Canada Revenue Agency (CRA) released its Mutual Agreement Procedure (MAP) Program Report for the fiscal year ending 31 March 2013. The report provides an overview of the operations of the MAP program, including statistical analyses of cases completed and in progress, covering cases dealing with resolution of double taxation or taxation not in accordance with a bilateral tax treaty. A Tax Alert discusses highlights from the MAP report.
Puerto Rico issues guidance on sales and use tax reseller exemption certificates
In light of the recent enactment of the Redistribution and Adjustment to the Tax Burden Act (Act 40-2013), Puerto Rico’s Treasury Department (PRTD) has issued various administrative determinations regarding the modifications made to the reseller’s exemption certificate program for sales and use tax purposes. The exemption granted through the reseller’s exemption certificate was eliminated effective 1 August 2013. However, the PRTD has extended the effective date of the elimination provisions and also provided rules to manage the 1% municipal license tax portion of the sales and use tax obligation. A Tax Alert has details.
US FATCA online registration site now open
On 19 August 2013, the US government's online FATCA registration site became effective. The site allows Financial Institutions to register completely online as a Participating Foreign Financial Institution (FFI), a Registered Deemed-Compliant FFI, a Limited FFI or a Sponsoring Entity. The site may also be used by financial institution to renew its Qualified Intermediary, Withholding Foreign Partnership, or Withholding Foreign Trust Agreement, if applicable. By registering online, the need to print, complete and mail paper forms can be avoided. Instructions for using the online registration system can be found in the FATCA User Guide. A Tax Alert has details.
This week's tax treaty news in the Americas
- Argentina and OECD: Argentina applies for full participation in OECD’s Committee of Fiscal Affairs
- Argentina and Seychelles: Argentina confirms Seychelles as tax haven
- British Virgin Islands and US: intention expressed to negotiate FATCA agreement
- Chile and Czech Republic: Czech Republic authorizes signing of tax treaty
- Ecuador and Korea:tax treaty ratified
- Mexico and Malta: tax treaty ratified
- Uruguay and Switzerland: exchange of letters applicable to tax treaty enters into force
This week’s Global Tax Alerts
- China clarifies implementation of preferential corporate income tax policies for software and integrated circuit industries (20 August 2013)
- Russian Tax Authorities publish guidance on two high tax risk transactions (20 August 2013)
- Indian Tax Administration announces draft rules on transfer pricing safe harbors (19 August 2013)
- Panama-UK Double Taxation Convention signed on 29 July 2013 (19 August 2013)
- Italy publishes final Exit Tax decree (15 August 2013)
- US Tax reform: A status update (15 August 2013)
- US Treasury and IRS 2013-2014 Priority Guidance Plan contains ongoing and new international tax projects (15 August 2013)
- Puerto Rico issues guidance on effective date of sales and use tax reseller exemption certificates and issuance of provisional certificates (15 August 2013)
- Luxembourg introduces draft law on patrimonial foundations (15 August 2013)
- CRA MAP report reflects improved timelines and continued high volume of Canada-initiated cases (15 August 2013)
- China issues clarifying guidance on corporate income tax treatment of hybrid investments (12 August 2013)
- International Tax Talk quarterly series to discuss interest deductibility and related issues (10 September)
The deductibility of interest on borrowings has recently come under greater scrutiny in many countries and is seen as a cornerstone issue in the current base erosion and profit shifting (BEPS) debate. In this quarter’s International Tax Talk webcast, our Global Tax Desk team focuses on thin capitalization and the related debt/equity characterization issues that may arise under select foreign tax regimes in relation to related and non-related-party borrowings. The countries/regions to be discussed include: Germany, Benelux, India and China. Register here..
- Managing risk in the US and Canada – EY’s 2013 global transfer pricing survey (12 September)
EY’s 2013 global transfer pricing survey reveals companies are placing a higher priority on managing risk associated with transfer pricing in reaction to heightened scrutiny by tax authorities. In an upcoming webcast, an experienced panel of former government officials will discuss the survey results with a focus on the US and Canadian implications of: (1) the increased taxpayer focus on risk management, (2) how taxpayers implement and document their transfer pricing policies, (3) key trends in controversy concerns, and (4) taxpayers’ experiences in resolving transfer pricing disputes. Register here.