– DAGTVA truth table –
DAGTVA® – Distribution of MNE profits
|No.||Problems exposed, requests, constraints and subjects||Origin||Pg||Li||Doc|
|58||Mt C – based on local benchmark activity and fixed yield Mt B.||Pillar 1||9||33||RBMcf|
30. Against that background, the “Unified Approach” proposes the following three tier mechanism:
Amount C – Any dispute between the market jurisdiction and the taxpayer over any element of the proposal should be subject to legally binding and effective dispute prevention and resolution mechanisms (RBMcm). This would include those cases where there are more functions in the market jurisdiction than have been accounted for by reference to the local entity’s assumed baseline activity (which is subject to the fixed return in B above) (RBMcf), and that jurisdiction seeks to tax an additional profit on those extra functions in accordance with the existing transfer pricing rules.
With the taxation defined on a transactional system, the turnover achieved in each jurisdiction by an MNE would be recorded to the nearest cent, there would be no supposed activity of the local entity that would not be taxed. As is explained in several sections including the RBMbr page which said:
« With the precision of the transactional system and the DAGTVA transfer pricing calculation, the notion of a necessarily approximate fixed compensation has no justification , as explained in the previous section RBMap dedicated to the“Amount A” option. »
We have already seen in the RBMbr page that DAGTVA not retain the “Amount B” option. So there is no new right to tax, there is no possibility of seeing a remuneration which could be arbitrarily fixed. This contributes to the simplification in a hoped international taxation system (related pages: RLSrl, PLSsy, RBAsm, RBAas, RBAps).
There is therefore nothing to renegotiate in this area of responsibility of each sovereign State, there is no new right which impose to modify the direct taxation, with the ease of having a majority international agreement accepted in this domain with the probable consent of the United States, which has already legislated internally in this area.