– DAGTVA truth table –
DAGTVA® – Scope of the taxation system
|No.||Problems exposed, requests, constraints and subjects||Origin||Pg||Li||Ref.|
|15||Limitations based on company size.||Pillar 1||7||30||CALft|
Quote : Further discussion should also take place to consider whether other sectors (e.g. financial services) should also be carved out (CASex), taking into account the tax policy rationale as well as other practicalities. Such discussion should also include consideration of size limitations (CALft), such as, for example, the €750 million revenue threshold used for country-by-country reporting requirements (CASch).
With DAGTVA there is no longer a turnover threshold of 750 million EUR which could delimit the size of exporting companies, for the simple reason that the tax treatment of transactions takes place on each of them and that the notion of threshold then becomes irrelevant.
It is this transactional taxation that the OECD seems to favor.
There is no longer any declaration to be made country by country because each of them will have the number and the amount of each transaction carried out by an MNE. It will suffice to accumulate the data locally to apply the appropriate taxation to each MNE.
NOTE: Although this is not the subject of this page, it is also important to note that the export of a product sold can only be done by a company, whether multinational or not, with the expreced authorisations by the tax authorities of the two countries to allow it.
The procedure would work like this:
- Authorization to continue the transaction (slide 14), the exporting company must normally be registered with its tax authorities so that they give the export authorization in compliance with the agreements of the OECD article 7 ,
- When this authorization is given, a copy for the first information is sent to the tax authorities of the market State in order they analyze the transaction put in reserve for a next treatment(1),
- These should expect a purchase declaration (in B²B) which will occur on slide 15,
- Declaration of equality of controlled declarations in slide 16,
- Automatic exchange of BEPS information between the two States and production of export / import bar codes in slide 22,
(1) – In a B²C transaction, it is this process which makes it possible to validate the bar codes of import documents which will authorize this importation, but above all it is this process which allows the market state to know of the transaction .
To conclude: We see that the notion of business size for exporting becomes unnecessary with DAGTVA to be able to trade internationally, which promotes the development of trade between States.