MNE benefit RBAas

Proposal for a Global Taxation System

– DAGTVA truth table –

DAGTVA® – Distribution of MNE profits

No. Problems exposed, requests, constraints and subjects Origin Pg Li Doc
83 Ap – simplified approach, agree on a different % depending on the sector. Pillar 1 14 30 RBAas

QuoteAppendix – Detailed proposal on profit allocation

Amount A (RBAag)

54. The second step in calculating Amount A would seek to approximate the remuneration of the routine activities based on an agreed level of profitability (RBAcm). In broad terms, these are profits which, by analogy to the residual profit split method, would be regarded as rewarding routine functions. They are accordingly excluded from the calculation of the pool of profits from which the allocation to market jurisdictions would be made (RBAbe). The level of profitability deemed to represent such “routine” profits could be determined using a variety of approaches, but a simplified approach would be to agree a fixed percentage(s), possibly with variances by industry (RBAas).

To quote the commented items concerning « Amount B » , the notion of remuneration based on fixed percentages which would be based on an approximation of these benefits, cannot be retained. Like the « Amount B » option in its entirety, in the context of taxation that is meant to be fair, as is the case with DAGTVA, the definition of the taxation that must be applied is defined at the end of the transaction with accounting precision. This tax definition is accompanied by sectoral analytical allocations that are necessarily known and taxed at their fair values ​​in each jurisdiction, this tax accuracy join what it is advocated in the « Amount A » and it for this reason that the « Amount B » option is no retained by the DAGTVA process.

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