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November 26, 2019 Digital Economy, Featured News, Multinational, OECD, Transfer Pricing
More than 100 speakers lined up at a November 21–22 Paris consultation to share their views on the OECD Secretariat’s compromise proposal to update to the rules for allocating multinational group profits and related taxing rights among countries, known as the “unified approach to pillar one.”
The OECD’s October 9 proposal seeks to merge into one unified proposal aspects of three competing proposals advanced by countries — the “user participation” proposal, supported by France; the “marketing intangibles” proposal, advanced by the US; and the “significant economic presence” proposal, favored by India and other G24 nations.
Each of the three proposals would give a greater share of taxing rights over multinational group profits to countries where the multinational’s customers or users reside.
The aim of the Secretariat’s proposal is to spur compromise among a coalition of 135 countries that make up the “Inclusive Framework on BEPS” by the end of 2020. It is expected that, as part of the agreement, countries will repeal or will halt plans to enact unilateral taxes on multinational digital firms, such as digital services taxes on revenue. The repeal of these unilateral measures is sought because they can create double taxation of multinational group profits and, due to their lack of coordination, they make the international tax system overly complex…..
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