21 March 2014
Americas Tax Center Weekly Roundup
Latest news — Americas
OECD releases discussion drafts on treaty abuse and hybrid mismatch arrangements
The OECD is moving very quickly on its Base Erosion and Profit Shifting (BEPS) agenda, a matter of major importance to multinationals. The OECD's recommendations are ultimately expected to result in tax legislation worldwide and are being followed and commented upon by taxpayers and practitioners globally. The OECD released a treaty abuse discussion draft on 14 March 2014, and a hybrid mismatch arrangements discussion draft on 19 March 2014. An OECD digital economy discussion draft is planned for 24 March 2014.
Chile issues instructions on modifications included in Law 20.630 on international taxation
On 11 March 2014, the Chilean Internal Revenue service issued Circular N° 14, which contains instructions on the modifications included in Law 20.630 on international taxation. Law 20.630 modified several tax provisions, including a permanent increase in the Chilean First Category Tax, a new tax on indirect transfers of Chilean underlying assets, worldwide-source taxation for branches and permanent establishments of foreigners operating in Chile, and a withholding tax exemption for payments abroad related to standard software. A Tax Alert has details.
Brazil issues Normative Instruction dealing with withholding tax on transactions between Brazilian residents and nonresidents
Brazilian Federal Tax Authorities (RFB) published Normative Instruction 1,455 (NI 1,455) on 7 March 2014, dealing with withholding tax on different types of income resulting from cross-border payments made to nonresidents. Although NI 1,455 supersedes previous regulations on the subject (Normative Instruction 252/2002 - NI 252), it does not introduce significant changes to the prior rules. A Tax Alert covers the most significant changes made by NI 1,455.
Guatemala confirms transfer pricing compliance for 2013
On 11 March 2014, the Guatemalan Tax Administration (Superintendencia de Administración Tributaria, a.k.a. SAT) issued an announcement in the Publinews gazette affirming the obligation for taxpayers to comply with the transfer pricing regulations for the 1 January 2013 to 20 December 2013 period. This clarifies the requirements in the wake of the issuance of Decree 19-2013 on 20 December 2013 in which transfer pricing regulations were postponed in Guatemala to become effective as of 1 January 2015. A Tax Alert has details.
Spanish High Court rules Brazilian juros qualify for participation exemption
The Spanish National Court issued a resolution on 27 February 2014, declaring that income received by a Spanish entity from its Brazilian subsidiary in the form of interest on net equity payments (juros sobre o capital proprio -JsCP-) can benefit from the Spanish participation exemption regime. This landmark case affects many Spanish multinationals (and foreign entities holding Brazilian interests through Spanish entities), as it may have a direct and significant impact in the effective tax rate of profit repatriations made from Brazil to Spain. A Tax Alert has details.
FATCA: Are you ready for 1 July 2014?
EY has published a series of multi-lingual insights into the potential impact of FATCA on non-financial companies. Available now via ey.com is a short animation in seven languages (Spanish, Dutch, English, French, German, Japanese and Mandarin) plus a more detailed podcast. Click here to go to the page and select your language.
New EY guide for foreign investments in certain US oil and gas assets
A new EY investment guide has been structured to help non-US investors broadly evaluate certain investments in US oil and gas assets. The guide summarizes the US Foreign Investment in Real Property Tax Act (FIRPTA) and its application to certain US oil and gas investments. It also provides a backdrop to certain investments that are commonly employed in today's market. It covers various oil and gas subsectors and identifies a variety of investment considerations designed to help non-US investors.
This week's tax treaty news in the Americas
- Argentina and Switzerland: tax treaty signed
- Brazil and Norway: tax treaty protocol signed
- Ecuador and China: tax treaty enters into force
This week's EY Global Tax Alerts
- EU Advocate General holds Danish recapture of taxes losses in conflict with freedom of establishment (19 March 2014)
- South Africa changes requirements to claim input tax deduction on importation (19 March 2014)
- Malawi mandates use of electronic fiscal devices for all registered VAT operators (19 March 2014)
- Italian Parliament passes framework for major tax reform (18 March 2014)
- Spanish High Court rules Brazilian juros qualify for participation exemption (18 March 2014)
- Tax Court of Canada issues important decision in Salaison Levesque Inc. regarding invoices of accommodation (17 March 2014)
- Special Bench of Mumbai Tribunal rules on approach to selection of comparable data (17 March 2014)
- Brazilian Federal Tax Authorities issue Normative Instruction dealing with withholding tax on transactions between Brazilian residents and nonresidents (17 March 2014)
- Delhi Tribunal rules on transfer pricing aspects of intra group financing transactions (17 March 2014)
- Chile issues instructions on modifications included in Law 20.630 on international taxation (17 March 2014)
- Guatemala Tax Administration confirms transfer pricing compliance for 2013 (14 March 2014)
- Italy announces increase of tax on financial income and decrease of IRAP (14 March 2014)
- OHADA revises Uniform Act on Commercial Companies and GIE (14 March 2014)
- India's CBDT clarifies tax withholding obligation on payments made to nonresident (13 March 2014)
- Proposed revisions to EU Savings Tax Directive are "very near" to being agreed (13 March 2014)
- Spanish Government introduces new tax rules on capitalization of debt (13 March 2014)
- Canada proposes changes to GST/HST election for closely related persons (13 March 2014)
- International tax reform developments and outlook (26 March)
Our next BorderCrossings webcast will share information and insights on international tax reform proposals in the US, and how the OECD's Base Erosion and Profit Shifting (BEPS) project is changing the global international tax policy landscape. Join us to learn how these proposals may affect your global tax position in the years ahead. Register here.
Recently archived webcasts now available on-demand
- Energy reform in Mexico
The recent Mexican tax reform will have major impacts on oil and gas companies looking to operate in and with Mexico. A recent webcast discussed: (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. Watch it on-demand here.
International tax talk quarterly series with the EY Global Tax Desk Network
The first Global Tax Desk webcast of 2014 focused on recent UK and Switzerland tax proposals, as well as developments from Israel and Italy – all of importance to multinationals operating in those jurisdictions.Watch it on-demand here.