W.S.T. truth table

Proposal for a Global Taxation System

 – DAGTVA truth table –

From the OECD document “Unified Approach” – Pillar 1

***********

DAGTVA® – Prerequisites for the taxation system

No. Problems exposed, requests, constraints and subjects Origin Pg Li Doc
1 The tax system Universel must be indépendant models policies. Dagtva / / PLUip
2 The Universal tax system compatible with the tax models already in use. Dagtva / / PLUma
3 The Universal tax system must not have emprise on a State. Dagtva / / PLUde
4 The Universal tax system must not modify existing federation of States. Dagtva / / PLUpf
5 Right to tax in market Juridiction. Pillar 1 4 40 PDDju
6 Simplicity, stabilisation of tax sytem. Pillar 1 4 43 PLSsy
7 Legal certainty in implementation of tax matters Pillar 1 4 44 PLSju
8 Strengthening legal security. Pillar 1 5 49 PRSju
9 The system Universel must be compatible and usable in USA. MTC / / PLUcm
10 If the tax system is unusable in USA, it will not exist. MTC / / PSSip

DAGTVA® – Scope of the taxation system

No. Problems exposed, requests, constraints and subjects Origin Pg Li Ref.
11 General Scope. Pillar 1 7 6 CACag
12 Digital / non-digital business models. Pillar 1 5 30 CAMnu
13 Narrow relations between businesses and consumers.
Pillar 1 7 21 CARet
14 Sector excluded (Financial Services). Pillar 1 7 29 CASex
15 Limitations based on company size.
Pillar 1 7 30 CALft
16 Turnover threshold – international declarations. Pillar 1 7 32 CASch

DAGTVA® – The link rules of the taxation system

 

No. Problems exposed, requests, constraints and subjects Origin Pg Li Ref.
17 New rule of the link without physical presence condition. Pillar 1 5 35 RLPph
17a Whole sectors of the digital economy aside. Pillar 1 6 15 RLPen
17b New link rule. Pillar 1 6 18 RLNrl
18 WST – Narrow definition, processing – direct / indirect collection of payment by MPF MTC 3 34 RLDet
19 WST – large Definition – treatment / direct collection / indirecte payment. MTC 3 35 RLDli
20 Simplification new link rule. MTC 3 35 RLSrl
21 New link rule link coupled with turnover threSholds  (1). Pillar 1 5 36 RLSca
22 New link rules applicable to modeste economies. Pillar 1 5 37 RLEmo
23 New link rule applicable by autonomous agreement.
Pillar 1 5 38 RLCau
24 Bypass of physical presence rules Pillar 1 6 23 RLCpp
25 Non-taxation without permanent establishment with physical presence Pillar 1 7 36 RLNet
26 New rule with sale thresholds to be defined (2). Pillar 1 9 19 RLSad
26a Threshold would also take into account certain activities. Pillar 1 8 9 RLNac
27 Provisions Possible – applicable to groups. Pillar 1 8 15 RLPag
27a Guarantee neutralité of treatment between different business models. Pillar 1 8 17 RLGnt

DAGTVA® – Distribution of MNE profits

No. Problems exposed, requests, constraints and subjects Origin Pg Li Doc
28 Respect of arm’s length principle “Unified approach”. Pillar 1 5 45 RBRpc
29 Respect for the arm’s length principle of the current Standards. Pillar 1 5 45 RBNac
30 Possible provisions – Determination of transfer prices. Pillar 1 6 31 RBDpx
31 Legal certainty – Arm’s lenght principle.
Pillar 1 6 41 RBSju
32 Amount A – Fraction of the presumed residual profit. Pillar 1 6 3 RBMap
33 Amount B – Fixed marketing remuneration. Pillar 1 6 5 RBMbr
34 Amount C – additional benefits. Pillar 1 6 8 RBMcs
35 New rules for distribution of profits – General concepts. Pillar 1 6 19 RBNge
35a Non-standard profits derived from intangible assets.
Pillar 1 6 35 RBIns
36 Solution for emerging and developing countries Pillar 1 6 39 RBSpg
37 Rules for the distribution of Profits – General concepts. Pillar 1 8 20 RBRge
38 Right to tax Non residents – UN / OCDE article 7/8/9. Pillar 1 8 23 RBNar
39 Rights to impose Residents & Subsidiaries – UN / OECD Article 7/8/9. Pillar 1 8 28 RBRfa
40 Majority of tax disputes involving MNEs.
Pillar 1 8 33 RBMdf
41 Attribution profits under the new link. Pillar 1 8 37 RBAbt
42 Creation of a link even in the absence of physical presence. Pillar 1 8 36 RBEla
43 Mt A – Set new rules of profit distribution. Pillar 1 8 39 RBMar
44 Possible provisions – transfer pricing & double taxation. Pillar 1 8 31 RBPpi
45 New proposed standards – double taxation. Pillar 1 8 52 RBNdi
46 Possible provisions – transfer pricing. Pillar 1 8 50 RBPpt
47 Significantly strengthen legal certainty. Pillar 1 8 52 RBRsj
48 Applicables to both benefits and losses. Pillar 1 9 5 RBAtb
49 Mt A fraction of the presumed residual profit of the EMN group. Pillar 1 9 10 RBMaf
50 Mt A – Fraction of residual profit ‘ grosso modo’. Pillar 1 9 10 RBMag
51 Mt A – Repartition key based on sales. Pillar 1 9 17 RBMac
52 Mt AConsensus between members of the Inclusive Framework. Pillar 1 9 18 RBMai
53 Mt B – Distribution functions always taxable Article 7. Pillar 1 9 21 RBMbf
54 Mt B – transfer prices on the arm’s length principle Article 7. Pillar 1 9 22 RBMbp
55 Mt B – Dissatisfaction with the current transfer pricing rules. Pillar 1 9 26 RBMbm
56 Mt B – fixed marketing remuneration. Pillar 1 9 24 RBMbo
57 Mt C mechanisms binding and effective dispute resolution. Pillar 1 9 31 RBMcm
58 Mt C – based on local benchmark activity and fixed yield Mt B. Pillar 1 9 33 RBMcf
59 Qe – possible use of regional segmentation or by branch of activity. Pillar 1 9 44 RBQrb
60 Qe – problematics treatment of losses, and determination of location. Pillar 1 9 45 RBQpt
61 Qe – benefit to market jurisdictions and digital business model. Pillar 1 9 51 RBQbj
62 Qe – multilatéral agreement on profits to market jurisdictions amount A. Pillar 1 10 11 RBQam
63 Qe – choice of the amount to be reallocated will ultimately be the result of a political agreement. Pillar 1 10 14 RBQcm
64 Qe – dispositions MNE double taxation provisions by entity and country. Pillar 1 10 20 RBQdd
65 Qe – in a group of MNEs holding Mt A benefits. Pillar 1 10 23 RBQdg
66 Qe – existing mechanisms for the elimination of double taxation. Pillar 1 10 26 RBQme
67 Qe – rules of relief double taxation in the « unified approach ». Pillar 1 10 27 RBQrd
68 Qe – overlaps of the three types of taxable profits (A, B and C). Pillar 1 10 30 RBQct
68a Qe – a recovery or « compensation » mechanism. Pillar 1 10 33 RBQrc
69 Qe – complex obligations with amount A for a non-resident entity. Pillar 1 10 42 RBQoc
70 Qe – withholding tax as a collection mechanism for  » Amount A « . Pillar 1 10 44 RBQrs
71 Qe – agree on the characteristics of the withholding tax system.
Pillar 1 10 46 RBQsc
72 Qe – taxation of a non-resident company and tax treaties.
Pillar 1 11 3 RBQie
72a Illustration – the group X is a group of MNEs. Pillar 1 11 9 RBIst
73 Ap – increase in the amount of profit attributed to market jurisdictions.
Pillar 1 13 11 RBAam
73a Ap – Amount A Generalities. Pillar 1 13 18 RBAag
74 Ap – presumed residual profit of an MNE at group or branch level. Pillar 1 13 21 RBAbp
75 Ap – presumed standard or routine profit based on assumptions.
Pillar 1 13 25 RBAbs
76 Ap – Appendix –  isolate non-standard benefits generated. Pillar 1 13 36 RBAin
77 Ap – simplify implementation and build consensus among members. Pillar 1 13 40 RBAsm
78 Ap – profit break-even point & transfer pricing rules.
Pillar 1 13 45 RBAsr
79 Ap – tax income from activities physically carried out in the territory.
Pillar 1 13 42 RBAir
80 Ap – Amount A – Consolidated Financial Statements – GAAP – IRFS. Pillar 1 14 5 RBAae
81 Ap – calculate benefits by industry, region and / or market. Pillar 1 14 13 RBAcb
82 Ap – calculate of amount A on the basis of an agreed level of profitability. Pillar 1 14 25 RBAcm
83 Ap – simplified approach, agree on a different % depending on the sector. Pillar 1 14 30 RBAas
84 Ap – benefits excluded from the mass of profits to be reallocated to the markets. Pillar 1 14 28 RBAbe
85 Ap – principles of simplification for calculating profit. Pillar 1 14 42 RBAps
86 Ap – fraction of benefits attributed to the jurisdiction of the market. Pillar 1 15 6 RBAfb
87 Ap – fraction benefits non-standard attribute to the market and % international. Pillar 1 15 14 RBAbi
88 Ap – agreement on the method of calculating   ‘ w ‘. Pillar 1 15 23 RBAmw
89 Ap – distributed profits (ie w %) between the juridictions the eligible market. Pillar 1 15 28 RBAwj
90 Ap – evaluate an approximately adequate profit.
Pillar 1 15 29 RBAea
91 Ap – simplified approach based on a fixed % application formula.
Pillar 1 15 37 RBAff
92 Ap – Amount B Generalities. Pillar 1 15 39 RBAbg
93 Ap – Mt Bfixed return to be evaluated at the level of profitability.
Pillar 1 15 41 RBMbe
94 Ap – Mt B – Fixed performance & reduce double taxation risks. Pillar 1 15 46 RBAbr
95 Ap – Mt B define the activities that give rise to a fixed yield. Pillar 1 16 3 RBAbd
96 Ap – Amount C Generalities. Pillar 1 16 7 RBAcg
97 Ap – Mt C objections on sales and distribution activities. Pillar 1 16 10 RBMco
98 Ap – Mt Cdispute settlement measures.
Pillar 1 16 15 RBMcr
99 Ap – Mt C double taxation RBPpi, RBNdi, RBQdd, RBQme, RBQrd, RBAbr. Pillar 1 16 16 RBMcd
100 Ap – Mt Cmandatory and effective procedures for settling disputes.
Pillar 1 16 20 RBMcp
101 Ap – Mt C – the benefit already assigned for the amount A cannot be reassigned. Pillar 1 16 23 RBMcb
102 Ap – Mt Cbenefit for amount A which gives entitlement to amount C.
Pillar 1 16 25 RBMct

Mt A = Amount A,  Mt B = Amount B,  Mt C = Amount C, Qe = Questions,   Ap = Apendice, MNE Multi National Enterprise

Note : all the rubrics and documents in link with this DAGTVA truth table are not yet translated, thanks to refer at the French original version if it necessary.