– DAGTVA truth table –
DAGTVA® – The linkage rules of the taxation system
|No.||Problems exposed, requests, constraints and subjects||Origin||Pg||Li||Ref.|
|23||New link rule applicable by autonomous agreement.
Quote : New link rule – For businesses within the scope, it creates a new nexus, not dependent on physical presence (RLPph) but largely based on sales. The new nexus could have thresholds (RLSca) including country specific sales thresholds calibrated to ensure that jurisdictions with smaller economies can also benefit (RLEmo). It would be designed as a new self-standing treaty provision (RLCau).
With DAGTVA the new treaty provision that would be applied between States who decide to have a common taxation system, ie a World Single Taxation (W.S.T.). Companies whose MNEs should comply with the laws applied in the countries where they operate. The MNEs do not set the law, States do! Then, it is up to the free decision of the MNE to trade there or not. We have to realize that these are the States, with the G20’s request to the OECD to propose a single tax system, which will decide on the global solutions to be adopted in this area and not the MNEs.
You will see in the DAGTVA calculation of transfer prices that the States do not leave much choice in the trade policies of MNEs. For recalcitrant States, such as tax havens, DAGTVA will not leave them much possibilities for maneuver in international trade.
The new rule of link with DAGTVA would be for the EMN to accept by default to be able to trade without having for all that a condition of physical presence (RLPph) but with the authorization of its local tax authorities to carry out an international trade based on sales (CAMnu) without any threshold for company size (CALft) or turnover (CASch – RLSca).