– DAGTVA truth table –
DAGTVA® – Distribution of MNE profits
|No.||Problems exposed, requests, constraints and subjects||Origin||Pg||Li||Doc|
|76||Ap – Appendix – isolate non-standard benefits generated.||Pillar 1||13||36||RBAin|
Quote : Appendix – Detailed proposal on profit allocation
Amount A (RBAag)
51. … In broad terms, this approach would replicate features of both the residual profit split (RPS) method (by introducing a threshold based on profitability to exclude the remuneration of routine activities) and the fractional apportionment method (by relying on formula-based calculations). This combination presents two main advantages that contribute to the practicability of the proposal. First, it would permit the isolation of the deemed non-routine profits earned by a business (RBAin).
If we consider as in the previous section RBAbs that the word « presumed » has no place in a document and leave the open gate for a taxation without accuracy, such as it is suggested by a method used for isolate the benefits. This is what is done with great precision the DAGTVA calculation of transfer prices, without relying on thresholds, nor excluding standard or routine activities. The fractional distribution automatically applies proportionally in each jurisdiction, leaving to it the free will of their sovereign decisions.
With DAGTVA there would be no formula-based calculations.
It can be added that the justice wants that the taxation must be the same for all, companies and consumers. In this case it is impossible to obtain a judjment in a trial in favor the tax autorities if an arbitrary and imprecise taxation against a seller compagny (MNE or other) is applied. In front of States, in case of trial, MNEs will win in all situations.