In order for US businesses with international operations to avoid incurring significant foreign tax liabilities, the United States has implemented a network of tax treaties with other countries. The treaties reserve reduced tax rates and other benefits solely for residents that can provide proof in the form of US residency certificates. US residents may request the residency certification by filing Form 8802 (Application for United States Residency Certification). The process of obtaining the certificate is notoriously slow and may take 10 or weeks or more.
A recent court case in New York (RegenLab USA LLC v. Estar Technologies Ltd. et al., 16-cv-8771) may provide some clarity on the permanent establishment implications of companies conducting business in the US through home offices. The Southern District Court of New York found that an employee’s home office constituted a “regular and established place of business” in the state.
The US Supreme Court eliminated the “physical presence” safe harbor that had been protecting companies from sales tax for nearly 50 years. Unless Congress revokes this decision, the case may adversely impact both US and non-US businesses, as well as US consumers.
Private Ruling 95/2018, published in the Official Gazette, clarifies some aspects of transfer pricing rules related to importing products into Brazil. The key points are:
Not long after the EU’s General Data Privacy Protection Regulation (GDPR) came into force, the Brazil president sanctioned bill PLC 53/2018 (Brazilian Data Protection Law, or the Bill), which regulates the protection, collection and processing of personal information by both private companies and public authorities.
The Australian government has published a discussion paper on whether to introduce a new interim digital tax. The digital tax is expected to apply to service providers such as news and information providers (e.g., search engines and digital advertising), digital streaming and sharing services, accommodation platforms and other digital platforms.
New transfer pricing rules in Thailand go into effect January 1, 2019. The key provisions of the legislation include the following:
The Swiss Parliament has approved a revised version of Tax Proposal 17, for Swiss corporate tax reform. The first measures in the reform could come into force in 2020, depending on whether or not a referendum is requested.
The current version of the proposal includes a notional interest deduction (NID) for high-tax cantons, as well as substantial non-tax measures.
A new tax amnesty program has been launched in Italy (please refer to Law Decree No. 119, dated October 23, 2018). The program is already effective, but has to be converted into law by December 22, 2018.
The program offers relief from certain penalties and interest if taxes are paid in full. In some instances, the taxes could be paid in instalments over a period of time.
In October 2018, the Italian Tax Authorities (ITA) issued clarifications on the possibility of transfers of excess tax credits between group companies. The transfers relate to excess tax credits generated by a company before entering into the group consolidation. The information issued by the ITA includes a clarification that qualifying excess tax credits must be certified in the tax return of the assignor as well as the consolidated tax return of the group.
On December 31, 2018, the minimum wage will increase in New York. The new rates will vary depending on the location and, in New York City, the size of the business.
A bill has been issued in Italy to transpose the EU directives on anti-tax avoidance (ATAD) into Italian law. If accepted the bill would replace current laws on interest deduction for corporate entities, exit and entry tax rules, and CFC rules. Once enacted, the legislation is likely to apply to calendar year 2019.