– DAGTVA truth table –
DAGTVA® – Distribution of MNE profits
|No.||Problems exposed, requests, constraints and subjects||Origin||Pg||Li||Doc|
|95||Ap – Mt B – define the activities that give rise to a fixed yield.||Pillar 1||16||3||RBAbd|
Quote : Appendix – Detailed proposal on profit allocation
Amount B (RBAbg)
63. Whilst the distinction between marketing and distribution activities and others performed by an MNE group will, in most cases, be clear, there will be some borderline issues. Therefore, a clear definition of the activities that qualifies for the fixed return would be required (RBAbd). The quantum of the fixed return could be determined in a variety of ways: it could be (1) a single fixed percentage; (2) a fixed percentage that varied by industry and/or region; or (3) some other agreed method.
With transactional taxation as it may appear in the international trade and regulated by the DAGTVA transfer pricing calculation, the application of tax directives is proportional to the amount of the transaction between States, whether on direct or indirect taxation. It is the General Tax Code of each jurisdiction that already sets what should be taxed and at what amount. To obtain a fairness taxation, it seems unacceptable that once tax is applied, the return on the transaction is again limited at a certain threshold, it would then become useless to produce in order to sell!
Also obtaining a General Tax Code common to all jurisdictions seems an unreachable challenge!