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  • Service: Tax & Legal, International Corporate Tax
  • Date: 6/11/2014

International Tax - Asia & MESA (1 May and 31 May 2014) 

This e-newsletter gives you an overview of international tax developments being reported globally by KPMG firms in the Asia Pacific & MESA regions between 1 May and 31 May 2014.

 

 

 

Australia

Japan

New Zealand

Sri Lanka

China

Jordan

Oman

Taiwan

Hong Kong

Kuwait

Pakistan

United Arab Emirates

India

Malaysia

Saudi Arabia

Vietnam

 

To contact the International Tax Group in Russia and the CIS go to the Contacts section.

 

Tax area concerned

Relevant
date/case reference

Description of measures and publication link
(Considerations in italic where necessary)

Australia

Tax legislation adopted and regulatory update

Various tax areas

May 2014

KPMG in Australia prepared reports on the following developments:

Tax consolidation changes

Non-residents beware

Who would come to tax for innovation?

A tax by any other name

Section 23AJ reforms

Funding productivity projects through the Emissions Reduction Fund

Corporate tax rate and PPL changes

Read more

KPMG in Australia prepared reports on the following developments:

Foreign income tax offsets

What is the best state in which to do business from a state tax perspective?

Read more

KPMG in Australia prepared reports on the following developments:

R&D tax offset and NTER entities

Asia funds

“Absolute entitlement” and trustee’s power of disposal

Read more

KPMG in Australia prepared reports on the following developments:

Australian shipping reform

Cautionary tale for R&D tax claimants

Free trade agreements

Read more

Proposed legislation

Transfer pricing

May 2014

The Australian Taxation Office (ATO) released two draft rulings setting forth its position on recently codified measures for “reconstruction” authority and for new documentation requirements under the transfer pricing regime of the Australian tax law.
Read more

Federal budget

2014

Australia’s Commonwealth Treasurer delivered Australia’s 2014 federal budget.
Read more

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China

Tax legislation adopted and regulatory update

Anti-avoidance legislation

May 2014

China’s State Administration of Taxation issued guidance to clarify the definition of “beneficial owner” for purposes of “entrusted investments.”
Read more

Pilot free trade zone

21 April or 1 May 2014

Shanghai Customs released the first batch of 14 new rules on supervision in the China (Shanghai) pilot free trade zone.
Read more

Tax incentives

25 March 2014

Guidance released by the tax authorities concerns a reduced corporate income tax rate of 15 percent as available as an incentive for investments made in certain areas of China.
Read more

VAT

1 June 2014

Recently issued guidelines address the VAT reforms for the telecommunications sector in China.
Read more

Treaties

Customs cooperation agreement

16 May 2014

Representatives of China and the European Union signed a mutual recognition agreement and agreed to greater customs cooperation.
Read more

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Hong Kong

Tax legislation adopted and regulatory update

FATCA

May 2014

Hong Kong and the United States substantially concluded discussions on an inter-governmental agreement (IGA) for use by financial institutions in Hong Kong to comply with U.S. legislation known as FATCA. Hong Kong’s Financial Services and the Treasury Bureau released a list of “frequently asked questions” (FAQs) about the FATCA regime.
Read more

Administrative and case law

Tax fraud

Moulin Global Eyecare Trading (in Liquidation) v. Commissioner of Inland Revenue (FAVC No. 5 of 2013)

The Court of Final Appeal issued a judgment in a case concerning whether the knowledge and fraudulent actions of company directors can be attributed to the company. The decision concludes that no tax refund can be paid because of such fraudulent conduct of the company directors.
Read more

Treaties

IGA-FATCA

27 May 2014

Hong Kong and the United States have substantially concluded discussions on an IGA for facilitating compliance by financial institutions in Hong Kong with U.S. law known as “FATCA.”
Read more

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India

Tax legislation adopted and regulatory update

VAT

2 June 2014

With imminent bifurcation of the state of Andhra Pradesh into two states (Telangana and the residuary state of Andhra Pradesh or Seemandhra) to be effective 2 June 2014, a list of additional frequently asked questions (FAQs) was released by the tax authorities.
Read more

Administrative and case law

Transfer pricing

Deloitte Consulting India Pvt. Ltd. v. ACIT (ITA Nos. 7650 and 7651/Mum/2013)

The Mumbai bench of the Income-tax Appellate Tribunal upheld the imposition of a 100 percent penalty under section 271(1)(c) of the Income-tax Act. The tribunal determined that the amended (revised) return was filed by the taxpayer only after the return had been referred to the Transfer Pricing Officer and was filed only in anticipation of a transfer pricing adjustment. The tribunal, therefore, held that the amended return was not “voluntarily” filed.
Read more

Various tax areas

May 2014

Case law has been published in India with respect to the following subjects:

Income from purchase and sale of shares through discretionary portfolio management scheme is taxable as capital gains, not business income

MFN treatment under India-France tax treaty denied, with respect to “make available” clause

Read more

Case law has been published in India with respect to the following subjects:

Transfer of undertaking without monetary consideration is an exchange transaction, not a slump sale

Acquisition cost of tenancy rights to be considered in computing capital gain

Carried forward losses of amalgamating co-operative societies

Read more

Case law has been published in India with respect to the following subjects:

Seconded employees providing business support services constitute “service permanent establishment (PE)” in India

Rig’s unused period due to repairs and maintenance not considered for PE in India

Taxation of offshore, onshore supply and services under the composite contract

Amortization of infrastructure construction projects (e.g., roads and highways)

Read more

Taxation of royalty income

Set Satellite (Singapore) Pte Ltd

The Bombay High Court held that a payment by the taxpayer for rights to telecast cricket matches is not taxable in India because there was no economic link between that payment and taxpayer’s PE in India. The liability for the payment was incurred by the taxpayer in connection with its broadcasting operations in Singapore, and had no connection with the marketing activities conducted through its PE in India.
Read more

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Japan

Tax legislation adopted and regulatory update

BEPS

April 2014

The Japanese Cabinet Office (Naikaku-fu) in late April 2014 posted a discussion paper (Japanese) used by the Tax Commission (Zei-Cho), and outlining certain tax issues for consultation—specifically, the Japanese government's response to a global tax debate and reforms concerning BEPS.
Read more

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Jordan

Tax legislation adopted and regulatory update

Social security, corporate and personal tax income tax

2014

Jordan is increasing its social security rates, in stages, as of 1 January 2014 and modifying the income base on which the rates apply. Jordan has also proposed to increase its rates of corporate and personal income tax, to increase the withholding tax rate on fees for non-residents’ services, and to revise how sales tax applies to mobile devices.
Read more

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Kuwait

Tax legislation adopted and regulatory update

Tax administrative matters and  deductibility of expenses

May 2014

The Kuwait tax authority issued guidance on tax administrative matters, as well as guidance concerning the deductibility of expenses for tax purposes.
Read more

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Malaysia

Tax legislation adopted and regulatory update

Transfer pricing

2014

The Malaysian Inland Revenue Board has been active in monitoring taxpayer compliance with section 140A and the transfer pricing rules and guidelines. In addition to transfer pricing audits, there has been a three-fold increase in the issuance of Form MNE to groups of companies.
Read more

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New Zealand

Tax legislation adopted and regulatory update

Transfer pricing

May 2014

A new, strict approach to transfer pricing by the Australian tax authorities will affect and increase costs of New Zealand businesses with Australian operations.
Read more

Proposed legislation

Budget

2014

New Zealand’s budget 2014 was tabled on 15 May 2014.
Read more

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Oman

Tax legislation adopted and regulatory update

Tax assessment process

Tax years up to and including the 2012 tax year

The Oman tax department announced that it plans to complete tax assessments for tax years up to and including the 2012 tax year.
Read more

Special economic zone

May 2014

Regulations have been issued regarding incentives available to businesses operating in the new special economic zone at Duqm. The regulations also set out the requirements that businesses must satisfy to qualify for the incentives.
Read more

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Pakistan

Tax legislation adopted and regulatory update

Tax incentives for alternative energy sector

May 2014

Pakistan offers tax incentives for foreign investors in the country’s alternative energy sector.
Read more

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Saudi Arabia

Tax legislation adopted and regulatory update

Corporate income tax

March 2014

A ministerial resolution (MR 1776) issued in March 2014 introduces changes to Saudi Arabia’s corporate income tax rules and clarifies certain industry-specific issues.
Read more

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Sri Lanka

Proposed legislation

Budget

2014

Recent tax developments in Sri Lanka include proposals affecting foreign investors, as announced in the country’s 2014 budget.
Read more

Treaties

DTT

January 2014

Sri Lanka agreed to an income tax treaty with Bahrain, as reported in the official gazette in late January 2014.
Read more

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Taiwan

Tax legislation adopted and regulatory update

R&D

6 May 2014

The Ministry of Finance and Ministry of Economic Affair on 6 May 2014 issued a third amendment to the R&D guidance rules.
Read more

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United Arab Emirates

Tax legislation adopted and regulatory update

Residency certificates, trade agreements and tax treaties

May 2014

New developments in the United Arab Emirates concern tax residency certificates for free trade zone entities and newly signed or ratified trade agreement with the Netherlands and income tax treaties with Panama and Slovenia.
Read more

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Vietnam

Tax legislation adopted and regulatory update

FATCA

May 2014

The State Securities Commission of Vietnam issued guidance recommending all securities companies in Vietnam to take necessary actions to comply with the U.S. law known as “FATCA.”
Read more

VAT

May 2014

Guidance from Vietnam’s tax department addresses when VAT applies for “on-the-spot” import and export.
Read more

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  For a full summary of global tax developments, visit kpmg.com/TaxNewsFlash.

 
 

Contacts

Anna Voronkova
Partner,
Head of International Tax
+7 (495) 937 44 24

 

Alexander Tokarev
Senior Manager,
International Tax
+7 (495) 937 44 77
 

   

Evgenia Wolfus
Partner,
International Tax
+7 (495) 937 44 19

 

Elena Dolgova
Manager,
International Tax
+7 (495) 937 44 77

 

Olga Ermolaeva
Senior Manager,
International Tax
+7 (495) 937 44 77