– DAGTVA truth table –
DAGTVA® – Distribution of MNE profits
|Problems exposed, requests, constraints and subjects
|Qe – agree on the characteristics of the withholding tax system.
Quote : 2.5. Pending key questions
Other implementation issues.
39. Where the tax liability for Amount A is assigned to an entity that is not a resident of the taxing jurisdiction, enforcement and collection could be more complex (RBQoc). It is worth exploring whether a withholding tax would be an appropriate mechanism for the collection of the designated Amount A (RBQrs). However, if countries choose to use it (and as an administrative mechanism to simplify and assure the collection of an underlying taxing right, it would be a matter for domestic law) it would be necessary to agree the features of the system of withholding (RBQsc) that jurisdiction could commit to apply.
We have already seen in many pages that the « Amount A » option is the unique solution retained by DAGTVA that may be taken in consideration, before all profits will be defined in each jurisdiction where their are generated. By consequences the withholding system at source applied as you can see in the slideshow in reference is done by the seller’s tax authorities in a special situation for not to penalise the cash-flow of this seller.
See the previous section: RBQrs for all other informations.