13 September 2013

Americas Tax Center Weekly Roundup

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Latest news — Americas

Mexico's president presents tax reform proposal to Congress

On 8 September 2013, President Peña Nieto presented a long-awaited tax reform proposal to the Mexican Congress. The proposal must be debated and approved by the two houses of Congress before becoming law. In addition to increasing the tax rate and eliminating certain deductions, the proposed reform includes anti-abuse provisions. The proposed reform is lengthy and eliminates some taxes, while creating new ones. A Tax Alert discusses some of the reforms affecting businesses in Mexico.
A separate Tax Alert discusses a proposal, included in the tax reform bill, to introduce a mining royalty regime, along with other changes that will affect mining operations in Mexico.
A third Tax Alert discusses how the proposal would significant affect the maquiladora industry.

Argentine House of Representatives approves tax reform bill

On 4 September 2013, the Argentine House of Representatives (Cámara de Diputados), the first of the two chambers of the Congress that must endorse a bill in order to convert it into law, approved the tax reform bill recently proposed by the Executive Power. Some amendments were included in the version of the bill approved by the House of Representatives. The Senate must now discuss the bill, and once approved by the Senate, it must be promulgated by the Executive Power and published in the Official Gazette to enter into force. A Tax Alert has details.

New measures for Canada’s duty relief foreign trade zone (FTZ)-type programs

Following a review of Canada’s FTZ-type programs set in motion in the 2013 federal budget, Minister of State (Finance) Kevin Sorenson announced on 29 August 2013 important new measures aimed at improving benefits to Canadian importing and manufacturing businesses and attracting new foreign direct investment. The new measures are a real improvement that will facilitate access, reduce administration and eliminate costs to access Canada’s duty relief programs. A Tax Alert has details.

Canada auditing research and development claims using new 'Five Questions'

The Canada Revenue Agency has begun reviewing Scientific Research and Experimental Development (SR&ED) claims according to a new policy, under which, for a project to be considered eligible for SR&ED investment tax credits, the project must meet a five-part test known as the "Five Questions." This structured audit approach seeks specific answers and supporting evidence about the limitations of the prior technology, and why more than technical due diligence is needed for the work to develop the new or improved technology to address the taxpayer’s needs. A Tax Alert has details.

EY VAT newsletter highlights global indirect tax developments

EY’s VAT newsletter addresses the many ways that VAT can affect businesses and the changing rules around the world. Although aimed specifically at a US audience, the coverage is global. The latest issue discusses, among other things, the introduction of VAT in the Bahamas, significant amendments to the credit for sales tax paid in Costa Rica, and advocacy for a national consumption tax in the US.

EY Canada reviews recent significant tax news and developments

TaxMatters@EY, a monthly bulletin prepared by EY Canada, provides a summary of recent Canadian tax news, publications and resources. The September 2013 issue discusses the coming doubling of the interest rate for income splitting prescribed rate loans, highlights from EY’s 2013 Global Transfer Pricing Survey and International Estate and Inheritance Guide, and a recent court decision that found that the terms of a unanimous shareholders’ agreement were effective in preserving Canadian-controlled private corporation status even though nonresident shareholders collectively had de jure control.

EY G20 Entrepreneurship Barometer 2013now available

The EY G20 Entrepreneurship Barometer 2013 analyzes and compares entrepreneurial ecosystems in the G20 countries — including Argentina, Brazil, Canada, Mexico and the US. The Barometer is based on an EY survey of more than 1,500 entrepreneurs across the G20 and uses the best data available to help countries measure how their entrepreneurs perform today. The Barometer shows that every G20 country has key strengths in entrepreneurship from which other nations can learn, but also highlights areas where they need to do more. The report covers access to funding, entrepreneurship culture, tax and regulation, education and training, and coordinated support.

This week's tax treaty news in the Americas

  • Barbados and Saudi Arabia: Barbados expresses intention to negotiate a tax treaty
  • Ecuador and Qatar: tax treaty negotiations continue
  • Uruguay and Belgium: tax treaty details available
  • US and Belgium: US announces competent authority agreement on application of authorized OECD approach
  • US and Spain: Spanish Congress approves FATCA agreement

This week’s Global Tax Alerts

Upcoming webcasts

  • Puerto Rico's tax regime after Act 40-2013 (18 September)
    On 30 June 2013, Puerto Rico enacted Act 40-2013, which includes significant changes to the Puerto Rico Internal Revenue Code of 2011, as amended, principally in the area of sales and use (SUT) and income taxes. Act 40-2013 is one of the various tax and non-tax measures that the Governor of Puerto Rico approved for the government’s budget for fiscal year 2014 and forward. An upcoming webcast will discuss these new and controversial tax measures. Register here.