Weekly Tax Matters 13 February 2015 (PDF

Transcription

Weekly Tax Matters
KPMG LLP (UK)
13 February 2015
contents
TAX POLICY
•
OECD update on Country by Country
reporting
CORPORATE TAX
•
•
•
Tax Devolution in Wales: Land Transaction
Tax
Consultation on taxation of loan
relationships and derivative contracts
Leases, nominees and SDLT
INDIRECT TAX
•
•
Mapfre Asistencia and Mapfre Warranty Advocate General’s Opinion released
HMRC Brief 2 (2015): VAT grouping rules
and the Skandia judgment
EMPLOYMENT TAX
•
•
•
Updating tax code information online
Employment Related Securities Bulletin
and templates
High Court case on death in service
benefits and working abroad
© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG
network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.
contents
INTERNATIONAL STORIES
•
•
Tax Journal – international briefing for
January
International round up
OTHER NEWS IN BRIEF
© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG
network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.
TAX POLICY
OECD UPDATE ON COUNTRY BY
COUNTRY REPORTING
The OECD has published further
guidance on the implementation of
the CbC Report providing greater
clarity on a number of key issues.
Julie Hughff
 +44 (0)20 7311 3287

[email protected]
Aron Mayer
 +44 (0)20 7311 3262

[email protected]
On 6 February 2015, as part of its ongoing Base Erosion and Profit Shifting (BEPS)
project, the OECD published further guidance on the implementation of the Country by
Country Report (CbC Report) providing greater clarity on:
•
•
•
•
which multinational groups (MNEs) will be in scope;
when the reporting requirement will start;
conditions for obtaining and using the CbC Report; and
the implementation framework.
The guidance explains that the ultimate parent of the MNE group will be required to file
the CbC Report with the tax authority in their jurisdiction of residence. The intention is
then for tax authorities to automatically share CbC Reports with countries where the
MNE operates where certain conditions regarding confidentiality, consistency and
appropriate use are met. Countries have agreed to develop an implementation
package for the exchange of reports between tax authorities by April 2015. There
remains a risk that local filing will be required if the implementation framework does not
deliver what is required to facilitate automatic sharing.
The first period in scope will be the MNE’s fiscal year beginning on or after 1 January
2016 and filing will be within 12 months, so the first filings will be by 31 December
2017. A report will be required each year but there will be an exemption for MNE’s with
annual consolidated group revenue in the immediately preceding fiscal year of less
than €750m. There will be no other exemptions from reporting and no general
exemption for investment funds.
Please speak to your usual KPMG Tax contact if you need any advice on how this new
guidance could affect your group or help with designing and implementing processes
for collating and reporting the data.
© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
1
CORPORATE TAX
TAX DEVOLUTION IN WALES: LAND
TRANSACTION TAX
A consultation has been published on
a Land Transaction Tax which is
intended to replace Stamp Duty Land
Tax in Wales from April 2018.
Sean Randall
 +44 (0)20 7694 4318

[email protected]
Pauline Hudd
 +44 (0)117 905 4538

[email protected]
On 10 February 2015, the Welsh Government published a consultation document titled
‘Tax Devolution in Wales – Land Transaction Tax’. This follows on from the recently
passed Wales Act 2014 which allows devolution of a range of tax and borrowing
powers to Wales.
This consultation seeks views on the format of a new Welsh tax to replace UK Stamp
Duty Land Tax (SDLT) on transactions in land in Wales, from April 2018. Following the
recent reform of the so-called ‘slab’ system of SDLT in the UK, the stated aim of the
Welsh Minister for Finance and Government Business is to “explore any other ways in
which we can improve the current system to make it more effective, more efficient, and
better suited to the priorities of Wales”.
Much of the focus is around the rates that could apply comparing the UK SDLT rates
and the proposed Scottish rates for the new Land and Buildings Transaction Tax
(LBTT). There are also discussions around the system of taxation for non-residential
buildings and various other specific matters. There are few definite proposals at this
point – the consultation is focussed on seeking views from a wide range of
stakeholders before decisions are made.
Comments have been requested by 6 May 2015.
2
CONSULTATION ON TAXATION OF
LOAN RELATIONSHIPS AND
DERIVATIVE CONTRACTS
HMRC have published minutes of
working group meetings that have
taken place over the past year.
Rob Norris
As part of the ongoing consultation on the taxation of loan relationships and derivative
contracts, the draft Finance Bill issued on 10 December 2014 included a large number
of provisions. In addition, three sets of regulations were issued in December primarily
dealing with the consequences of new GAAP accounting.
HM Revenue & Customs (HMRC) have now published minutes of the meetings of the
working groups of representatives from HMRC and business that have taken place
over the past year. These provide useful background regarding the legislation included
in the draft Finance Bill and other areas where further legislation is still under
consideration.
 +44 (0)121 232 3367

[email protected]
Mark Eaton
 +44 (0)121 232 3405

[email protected]
LEASES, NOMINEES AND SDLT
KPMG’s Simon Yeo looks at the SDLT
treatment of leases when nominees
and bare trusts are involved.
Simon Yeo
 +44 (0)20 7311 6581

1
[email protected]
The anti-avoidance provisions on bare trusts and nominees in the stamp duty land tax
(SDLT) legislation are successful in tackling the avoidance HMRC had in mind, but
they do so by fundamentally inverting the natural order. So far as the grant of leases is
concerned, nominees and bare trustees are treated as the lessor or lessee, while the
beneficial lessee and lessor are ignored. Perhaps not surprisingly, this can produce
unnatural results throughout the SDLT legislation.
In a recent article for Tax Journal 1, Simon Yeo, a senior manager in the stamp taxes
group at KPMG in the UK, looks in detail at some of the SDLT issues that can be
caused by targeted anti-avoidance legislation, for transactions such as sale and
leasebacks, surrender and regrants of leases, and leases to partnerships.
First published in Tax Journal on 6 February 2015. Reproduced with permission.
3
INDIRECT TAX
MAPFRE ASISTENCIA AND MAPFRE
WARRANTY – ADVOCATE
GENERAL’S OPINION RELEASED
The Advocate General has opined
that Mapfre Warranty’s services are
exempt.
Adrian Smith
 +44 (0)1473 204469

The Advocate General’s (AG) Opinion has been released in this reference from
France. Unfortunately the Opinion has not been released in English, therefore our
commentary is based on a translation of non-English texts. For a more detailed
analysis please see a copy of our alert.
Although the cases of Mapfre Warranty and Mapfre Asistencia were joined by the
referring court the questions only concern the VAT treatment of services provided by
Mapfre Warranty (Mapfre). Mapfre supplied a guarantee against defects on second
hand cars. The guarantee was offered by car dealers to their customers when they
purchased a second hand car. If there was a fault with the car the customer could
obtain a quote to repair the car from a garage and this was submitted to Mapfre for
agreement. The repair costs would then be met by Mapfre.
[email protected]
The AG found the guarantee was insurance within the meaning of Article 13(B)(a) of
the Sixth Directive. The AG opined that the guarantee was provided by Mapfre to the
customer independent of the supply by the dealer of the vehicle. Therefore, the
guarantee should be regarded as a separate supply to the supply of the vehicle and
the essential characteristics of the supply was one of insurance.
4
HMRC BRIEF 2 (2015): VAT
GROUPING RULES AND THE
SKANDIA JUDGMENT
HMRC has released its Brief on the
VAT Grouping rules following the
CJEU Judgment in Skandia America
Corp (C-7/13).
Mark Treacher
 +44 (0)20 7311 2726

[email protected]
HM Revenue & Customs (HMRC) have released their Brief on the VAT Grouping rules
following the CJEU Judgment in Skandia America Corp (C-7/13). It confirms that UK
VAT accounting will be affected and VAT may become due in certain circumstances.
This change in treatment must be applied to services performed on or after 1 January
2016.
The first change set out in the Brief is that an overseas establishment of a UKestablished entity will be seen as part of a separate taxable person where it is VAT
grouped in a Member State that operates similar ‘establishment only’ VAT grouping
provisions to those considered in Skandia. This will apply regardless of whether the UK
entity is part of a VAT group. This would mean that the UK entity receiving the services
would have to account for VAT under the reverse charge. Currently such services
would be disregarded on the basis that they are provided intra-entity.
Where the UK entity is VAT grouped, then any supplies by a VAT grouped overseas
establishment to other members of the UK VAT group will also be subject to the
reverse charge as HMRC consider it to be the overseas VAT group which is making
the supply. This will mean that the anti-avoidance provisions set out in VATA 1994
s43(2A) will no longer apply, so the reverse charge will be due on the full value of the
service received in the UK.
The Brief also confirms that a UK establishment providing services to a VAT grouped
overseas establishment, which would be taxable if provided in the UK, will need to take
that supply into account in ascertaining the right to input tax deduction.
5
EMPLOYMENT TAX
UPDATING TAX CODE
INFORMATION ONLINE
HMRC have launched a trial allowing
taxpayers with company cars to
make changes to their car and fuel
benefits online.
Steve Wade
 +44 (0)20 7311 2220

[email protected]
HM Revenue & Customs (HMRC) have announced the launch of an online trial which
marks the first step in allowing employees to update their tax code information online.
Initially, taxpayers within PAYE who have a company car will be able to use the online
service to make changes to both their car and car fuel benefits.
HMRC’s intention is to use this trial to gather feedback. The longer term aim (as set out
in HMRC’s Digital Strategy) is to allow taxpayers to view and update tax code
information more generally online, and taxpayers are likely to see this become
available later in 2015.
Employees wanting to use the new system to update their company car information
may benefit from using the new Gov.uk Verify service to register. This wholly online
system is being rolled out across Government and will ultimately replace the current
Self Assessment registration system (removing the need to wait for an activation code
to be sent out through the post).
Both registration using Verify and the ability to update tax code information online have
the potential to improve taxpayers’ experience of interacting with HMRC (and, in the
case of Verify, Government departments more generally) and we welcome the fact that
HMRC are using trials to gather feedback before making the service more widely
available.
6
EMPLOYMENT RELATED SECURITIES
BULLETIN AND TEMPLATES
HMRC have released the latest
edition of their Employment Related
Securities Bulletin and are issuing
new templates for share incentives
year end reporting.
HM Revenue & Customs have released the latest edition of the Employment Related
Securities Bulletin. This edition includes articles on:
•
•
Steve Wade
•
 +44 (0)20 7311 2220

[email protected]
Alison Hughes
 +44 (0)20 7311 2626

•
•
The ERS checking service, annual returns service and templates. Employers
should note here that although the article refers to templates being available,
these have in fact been temporarily withdrawn after some users experienced
problems. Revised templates will be added to this page on the Gov.uk site in
due course;
Confirmation that companies can use existing shares for employee shareholder
status (which potentially offers a zero percent capital gains tax rate) – it was
previously thought shares needed to be new issue;
Details of a consequential change to the legislation following the Finance Act
2014 changes to the tax treatment of employment related securities acquired by
internationally mobile employees;
Guidance for companies with tax-advantaged share plans approved before 6
April 2014 who now need to self-certify using the online service; and
Information on the impact of the Finance Act 2014 changes on the ability to
refer to equivalent overseas legislation when establishing new SAYE schemes.
[email protected]
If you have questions on any of the issues covered in the Bulletin, or on employment
related securities more generally, please get in touch with your usual tax contact.
7
HIGH COURT CASE ON DEATH IN
SERVICE BENEFITS AND WORKING
ABROAD
A recent High Court decision is a
reminder of the complexities that can
arise
when
dealing
with
internationally mobile employees.
Steve Wade
 +44 (0)20 7311 2220

[email protected]
The recent decision in Rai (In her own name and as Personal Representative of the
Estate of the late Gautam Rai) v Legal & General Assurance Society Ltd highlights the
potential complexities that can arise where employees become internationally mobile.
The case concerned whether death benefits should be paid following the death of Mr
Rai, who was employed in the UK and who then moved to work in India. Mr Rai died
following a road accident in India and the insurance company rejected his employer’s
claim for a payment in respect of death in service, arguing that Mr Rai had not met the
requirements of the policy at the point of his death.
The point at issue was the specific clause in the policy that stated that an employee
would no longer be covered by the policy if they either ceased employment or ceased
to be “ordinarily employed and resident in the United Kingdom”. The Court found that
he was not: he had chosen to go to work in India, and during his time there had made
only one brief visit to the UK. He could not be said, therefore, to be ordinarily resident
in the UK. Although he continued to be employed by a UK company, the Court noted
that this alone “cannot…suffice to establish that the assured was employed in this
country”. Instead, the relevant test was “where, ordinarily, did the employee perform
the acts which constituted his work for the employer?” (in this case, India). Mr Rai had
not met the policy requirements at the time he died and the benefits were not,
therefore, payable. Please note that the introduction of the Statutory Residence Test
only abolished ordinary residence for tax purposes and consequently Ordinarily
residence remains a concept for cases such as this and in fact for National Insurance
purposes.
Those employers who regularly have employees on international assignments are
likely to already have suitable policies in place to ensure continuity of cover in these
circumstances. Those with less experience, or who have not specifically examined the
wording of their insurance policies, should review whether employees working abroad
are, in fact, entitled to the benefits they would expect.
8
INTERNATIONAL
STORIES
TAX JOURNAL – INTERNATIONAL
BRIEFING FOR JANUARY
Chris Morgan’s latest summary of
international developments.
Chris Morgan
 +44 (0)20 7694 1714

2
[email protected]
In the latest of his regular articles for Tax Journal 2, Chris Morgan (Head of Tax Policy
and of the EU tax group at KPMG in the UK) rounds up recent international
developments. This month’s article looks at:
•
•
•
•
•
•
•
•
The diverted profits tax announcements made at Autumn Statement 2014;
Recent OECD publications on the base erosion and profit shifting (BEPS)
project;
The High Court decision in the FII GLO case;
The EU Economic and Financial Affairs Council (ECOFIN) meeting held on 9
December 2014;
Recently agreed Japanese corporate tax changes for 2015;
Brazilian tax changes;
Corporate tax reform in Norway; and
Changes to the advanced tax agreement (ATA) procedure in Luxembourg.
First published in Tax Journal on 30 January 2015. Reproduced with permission.
9
INTERNATIONAL ROUND UP
This week: sales tax scrutiny for
Canadian real estate companies; Asia
Pacific indirect tax regime report;
R&D changes in Australia; OECD and
G20 reach BEPS agreement; public
comments on BEPS Action 4
released; EC decision on Irish ATT
partially annulled; VAT warning for
Swiss financial industry companies;
Swedish PEs to withhold tax on
employee compensation; Dutch VAT
announcement following Skandia
America case; public comments on
BEPS Actions 8, 9 and 10 released;
transfer pricing implications of the
abandonment of the Swiss franc cap;
and new guidance on controlled
transactions in Taiwan.
Every week, KPMG member firms around the world publish updates on developments
in their country. In Weekly Tax Matters we’ll highlight a selection that may be of interest
to our readers.
Americas
Canada – Real estate companies may find their GST/HST and QST compliance
under additional scrutiny from the tax authorities in 2015.
More TaxNewsFlash – Americas can be found here and January’s International Tax
Newsletter for the Americas can be found here.
Asia Pacific
Asia Pacific - A report from KPMG International provides a summary of the indirect
tax regimes of 21 countries in the Asia Pacific region.
Australia – Changes to the R&D incentive rules have been passed by the Senate.
More TaxNewsFlash – Asia Pacific can be found here and January’s International Tax
Newsletter for Asia Pacific can be found here.
Europe
OECD - The OECD and G20 countries have reached an agreement concerning certain key elements of the base erosion and profit shifting (BEPS)
project.
OECD – The public comments on BEPS Action 4 (interest deductions and other financial payments) have been released, including comments
from KPMG in the UK.
Ireland – The General Court of the European Union has partially annulled a European Commission decision regarding Ireland’s rate of air travel tax
(ATT).
Switzerland – Companies in the financial industry should be careful not to trigger a VAT liability, according to a recent blog post by KPMG in
Switzerland.
10
Sweden - The tax authorities have announced that a foreign employer with a permanent establishment (PE) in Sweden must withhold tax on
compensation paid to its employees.
Netherlands - The Ministry of Finance has informally announced its position on the VAT implications of the Skandia America case.
More TaxNewsFlash – Europe can be found here and January’s International Tax Newsletter for Europe and Africa can be found here.
Transfer Pricing
OECD – The public comments on BEPS Actions 8, 9 and 10 (revisions to Chapter I of the Transfer Pricing Guidelines) have been released.
Switzerland - The abandonment of the exchange rate cap between the Swiss franc and the euro may have short and long term tax and transfer
pricing implications.
Taiwan - The Ministry of Finance has issued guidance relaxing the rules requiring a separate analysis for certain controlled transactions.
More TaxNewsFlash – Transfer Pricing can be found here.
11
OTHER NEWS IN BRIEF
OTHER NEWS IN BRIEF
This week: NICs Bill and Stamp Duty
Land Tax Bill receive Royal Assent;
employment intermediaries reporting
regulations laid before Parliament;
HMRC issue Brief on tonnage tax;
NICs Manual updated; OTS publish
minutes of Employment Status
Consultative Committee; Official Rate
of Interest reduced; BRC-KPMG Retail
Sales Monitor and Online Retail Sales
Monitor published; and REC-KPMG
Report on Jobs issued.
The National Insurance Contributions Bill received Royal Assent on 12 February,
becoming the National Insurance Contributions Act 2015.
The Stamp Duty Land Tax Bill received Royal Assent on 12 February 2015 and has
now been published as the Stamp Duty Land Tax Act 2015.
The Income Tax (Pay as you Earn)(Amendment No2) Regulations 2015 have been laid
before Parliament. These include the reporting requirements for employment
intermediaries set out in the recently published consultation response (see last week’s
Weekly Tax Matters). The reporting requirements take effect from 6 April 2015.
HM Revenue & Customs (HMRC) have issued a Brief on the tonnage tax flagging
requirements. Each year HM Treasury either “excepts” that year (i.e. disapplies the
general tonnage tax flagging requirements) or says that they cannot do so based on
EU/EEA flagging levels. Revenue & Customs Brief 1(2015) announces that as EU/EEA
flagging levels have declined over the latest review period, FY 2015 (1 April 2015 to 31
March 2016) shall not be an excepted year. Tonnage tax groups and companies,
therefore, need to consider the flagging of new vessels entering service, and in some
cases non-EU/EEA ships will not qualify unless reflagged.
HMRC have updated the National Insurance Contributions Manual to include
information on Class 2 NICs and property letting businesses.
The Office of Tax Simplification (OTS) has published minutes of the January meeting of the Employment Status Consultative Committee. These note
that the OTS report on employment status should be released at the end of this month, and that the OTS expects an initial response from the
Government in the Budget next month.
The Official Rate of Interest for use when calculating the taxable benefit of employer provided beneficial loans etc. will be 3 percent from 6 April, down
from the current rate of 3.25 percent, subject to the regulations coming into force.
12
The British Retail Consortium (BRC) and KPMG in the UK Retail Sales Monitor showed strong sales growth in January, with the Online Retail Sales
Monitor also reflecting an increase in online sales at the start of the year.
The volume of permanent job placements continues to rise, but the rate of growth of staff appointments has eased, according to the Recruitment and
Employment Confederation (REC) and KPMG in the UK’s Report on Jobs.
13
www.kpmg.co.uk
© 2015 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights
reserved.
The information contained herein is of a general nature and is not intended to address the circumstances of any
particular individual or entity. Although we endeavour to provide accurate and timely information, there can be
no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate
in the future. No one should act on such information without appropriate professional advice after a thorough
examination of the particular situation.
The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG
International.

Weekly Tax Matters 13 February 2015 (PDF

Transcription

Similar documents

Job in a day Brussels - Saturday, November 22

KESRA - KPMG

OECD BEPS Country by Count Tax Ma Background

TRANSLATION Independent Auditors` Report TO

How to Effectively Manage Employer’s Obligations

KPMG Business Traveller Foreign Earnings Deduction (FED) module

Healthcare provider compliance programs

Let’s talk about BEPS! ü Base Erosion and Profit Shifting (BEPS)

Joint Ventures - The `new normal` for corporate growth?