– DAGTVA truth table –
DAGTVA® – The linkage rules of the taxation system
|No.||Problems exposed, requests, constraints and subjects||Origin||Pg||Li||Ref.|
|24||Circumvention of physical presence rules||Pillar 1||7||23||RLCpp|
Quote : That in turn requires a change to the nexus and profit allocation rules not just for situations where there is no physical presence, but also for those where there is. Otherwise, taxpayers could simply side-step the new rules by using alternative forms of an in-country presence (RLCpp) (local branch or related entity),
As specified in the CALft page, the process by its organization prohibits bypassing the link rules.
It is also important to note that the export of a sold product can only be done by a company, whether multinational or not, if the tax authorities of both countries authorize the transaction following the complete compliance with the tax laws.
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 barcodes of the import documents which will authorize this importation but above all it is this process which allows the market State to know the existing transaction and to accumulate amounts subject to possible taxation on profits made without physical presence condition.
We see that the authorization given to the exporting MNE to continue the procedure in slide 14 prohibits any circumvention in the sequence of this procedure where nothing escapes the taxation authorities without which the publication of export / import barcodes becomes impossible.