14 February 2014
Americas Tax Center Weekly Roundup
Latest news — Americas
Canada issues 2014-2015 Federal Budget
On 11 February 2014, Canada’s Federal Finance Minister Jim Flaherty presented the 2014-2015 Federal Budget. A Global Tax Alert covers the key corporate tax provisions and other items of interest to multinational companies. An EY Canada Tax Alert offering a broader discussion of the measures included in the budget is also available. In addition, a webcast providing EY professionals’ insights and perspectives on the budget is available on-demand.
OECD releases Standard for Automatic Exchange of Financial Account Information
As expected, on 13 February 2014, the OECD released its Standard for Automatic Exchange of Financial Account Information. Under the Standard, participating jurisdictions would obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. The Standard consists of two components: (1) the Common Reporting Standard, which contains the reporting and due diligence rules to be imposed on financial institutions; and (2) the Model Competent Authority Agreement, which contains detailed rules on the exchange of information. A Tax Alert is pending.
Argentina issues additional regulations relating to tax reform on capital gains and dividends
Decree 2,334/2013, published in the Argentine Official Gazette on 10 February 2014, contains additional regulations to the tax reform on capital gains and dividends, which was introduced on 23 September 2013. The reform introduced a 15% income tax on the net gain derived from the sale, exchange, barter or disposition of shares, quotas, titles, bonds and other values. It also imposed a 10% withholding tax on dividends distributed by Argentine entities to Argentine individuals as well as to foreign shareholders. A Tax Alert describes the regulations.
Costa Rica expected to issue resolution requiring registered companies to disclose names of shareholders
The Costa Rican Tax Authorities are expected to issue a resolution requiring companies registered with the local mercantile registry to submit annually an information return identifying their shareholders’ names, including their ID or corporate ID number. The resolution is currently in draft form and is expected to be issued shortly. Based on the draft resolution, the first information return would have to be submitted between 20 February 2014 and 28 February 2014. A Tax Alert has details.
Panama amends penalty for noncompliance with transfer pricing return – Tax Alert now available
A Tax Alert is now available on Panamanian Law No. 114 of 10 December 2013, which amended Section 762-I of the Panamanian Tax Code to establish that the penalty for noncompliance with the transfer pricing information return obligation will not exceed B/.1 million (US$1 million). Moreover, the amended Section 762-I establishes that the tax return will require reporting with respect to the nature of the related-party transactions and other relevant information.
Canada and US sign FATCA agreement – Tax Alert now available
As we reported in last week’s Americas Tax Center Roundup, on 5 February 2014, Canada signed an intergovernmental agreement (IGA) with the US regarding the enhanced exchange of tax information in connection with the Foreign Account Tax Compliance Act (FATCA). The Canadian Department of Finance also released legislative proposals to implement the IGA under Canadian law, related explanatory notes and a selection of FAQs with responses. A Tax Alert from EY Canada on the agreement is now available.
EY’s Global tax policy outlook for 2014 is now available
EY’s 2014 Global tax policy outlook provides information on 60+ countries, as well as a review of the trends in legislation and known proposals for 2014. This year’s guide reports that the number and pace of changes designed to manipulate (i.e., broaden) the tax base has increased compared to prior years. New to the guide this year is the addition of a microsite on ey.com, which will allow practitioners to obtain updates on tax policy developments in countries as those updates are added.
Canada’s TaxMatters@EY – February 2014 issue available
TaxMatters@EY, a monthly bulletin prepared by EY Canada, provides a summary of recent Canadian tax news, publications and resources. The February 2014 issue discusses: (1) financial and estate planning considerations for the new year, (2) the importance of tax planning in managing a company’s reputational risk, (3) a recent Federal Court of Canada decision on whether the winnings from full-time online gambling are taxable, and (4) the top 10 things private company owners should think about to grow their business in 2014.
This week's tax treaty news in the Americas
- Canada and Israel: free trade agreement negotiations held
- Colombia and OECD: Colombia ratifies Convention and Protocol on Mutual Administrative Assistance in Tax Matters
- Mexico and Peru: tax treaty enters into force
- Mexico and Panama: free trade agreement negotiations ongoing
- Uruguay and Curaçao: intentions expressed to negotiate tax treaty
This week’s EY Global Tax Alerts
- Canada issues 2014 Federal Budget (12 February 2014)
- Australia issues paper on enhanced third party tax reporting for real estate, share market, credit card services and Government grants (12 February 2014)
- Costa Rican Tax Authorities expected to issue a resolution requiring registered companies to disclose shareholder names (11 February 2014)
- Panama amends penalty for noncompliance with transfer pricing return (11 February 2014)
- Iceland introduces new transfer pricing rules (11 February 2014)
- Canada and the US sign intergovernmental agreement to implement FATCA (10 February 2014)
- Seychelles increases pension rate contribution and implements new Tax Acts and reporting requirements (10 February 2014)
- South Africa introduces new tax clearance certificate application process (10 February 2014)
- UK research and development expenditure credit may impact tax cash flow (7 February 2014)
- Russia enacts major changes to the Profits Tax treatment of interest (7 February 2014)
- Russian court issues adverse decision on the applicability of thin capitalization rules to loans from foreign affiliated companies (7 February 2014)
- Dutch Supreme Court confirms tax equity treatment of equity instruments with debt characteristics (7 February 2014)
- OECD BEPS Action Plan: update and outlook (18 February)
Over the coming weeks, the OECD is planning significant activity with respect to its base erosion and profit shifting (BEPS) action plan. An upcoming webcast will examine the OECD’s progress in relation to the BEPS project and the implications for multinational businesses and will also look at BEPS-related developments around the globe. Areas of focus will include the latest activity with respect to the country-by-country reporting template, hybrid mismatch arrangements, treaty abuse and the digital economy. Register here.
- Internal customs and international trade training: Preferential trade agreements (19 February)
The next in a series of customs and international trade training webcasts targeted at Canada, Mexico and US personnel will cover the basic rules for applying trade agreement processes to obtain duty preference, including identifying benefits and compliance issues by assessing rules of origin, certification process, customs procedures and audit. Register here.
- Business Tax Services: managing research and development (R&D) incentives (19 February)
R&D incentives are an increasingly important element of tax policy and have grown in breadth and scope in recent years. An upcoming webcast will discuss how managing grants and incentives on a global scale can help organizations realize the opportunities available under the law to increase their return on investment. In addition, the webcast will cover current R&D trends and developments and the leading incentive management practices employed by companies. Register here.
- Global Payroll: one year on and closer to reality? (Rescheduled: 25 February)
Is one global payroll system an achievable goal for global organizations? Or are country-specific or regionally focused models more practical? One year ago, we asked global payroll leaders in multinational organizations to share their views. Their sentiments suggested that while one universal system is a good idea in theory, it’s probably not practical. One year later, we asked this question again to see if their opinions changed. An upcoming webcast will discuss the latest global payroll study results, including core challenges, best practices and more. Register here.
- Energy reform in Mexico (26 February)
This recent Mexican tax reform will have major impacts on oil and gas companies looking to operate in and with Mexico. An upcoming webcast will discuss: (1) Mexican energy and fiscal reforms and what these mean for the sector, (2) the Mexican business environment versus other energy hubs, (3) a transactional and tax overview for operating in Mexico, and (4) opportunities and issues for oil and gas industry participants. Register here.
- 2014 EY global transfer pricing survey (27 February)
An upcoming webcast will share predictions and insights from a survey of 2,000 EY transfer pricing professionals around the world. Join us to learn more about how transfer pricing trends, issues and events worldwide could affect your global compliance, controversy and planning in 2014. Topics to be covered include: (1) transfer pricing aspects of the OECD BEPS project, (2) developing countries’ role in shaping global transfer pricing compliance, and (3) current enforcement trends in various OECD countries. Register here.