– DAGTVA truth table –
DAGTVA® – Distribution of MNE profits
|No.||Problems exposed, requests, constraints and subjects||Origin||Pg||Li||Doc|
|38||Right to tax No residents – UN / OCDE article 7/8/9.||Pillar 1||8||23||RBNar|
24. Once it is determined that a country has a right to tax profits of a non-resident enterprise (RBNar), the next question is how much profit the rules allocate to that jurisdiction. This matter is currently answered by Article 7 (Business Profits) of both the OECD and United Nations Model Tax Conventions.
- 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 agreement 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).
(*) – But it is possible the sale is authorized by the buyer’s State in special circumstances where the seller would not have a physical presence. The main thing for this State is to be informed the existence of the transaction which will allow its to receive the sale taxes as specified below by the production of import bar codes in slide 22,
(1) – In a B²C transaction, it is this process which makes it possible to validate the bar codes of the import documents which will authorize this importation but above all it is this process which allows the market State to know of the transaction.
about the « question is how much profit the rules allocate to that jurisdiction » , the answer is given by the DAGTVA calculation of transfer prices, which define the amount of taxes that must be returned. MNE entities cannot escape the obligation to respect the OECD agreements.