{"id":7648,"date":"2020-10-09T18:16:30","date_gmt":"2020-10-09T17:16:30","guid":{"rendered":"http:\/\/www.dagtva.com\/?page_id=7648"},"modified":"2021-05-15T07:30:13","modified_gmt":"2021-05-15T06:30:13","slug":"distrib-8-wstax-4-en","status":"publish","type":"page","link":"https:\/\/www.dagtva.com\/?page_id=7648","title":{"rendered":"Distrib 8% Wstax 4% EN"},"content":{"rendered":"

\u00a0– Situation where a production State ‘A’ with standard tax rates applies a WSTAX at 4% on a transfer price to State ‘B’ which has a TAX\/VAT and CIT rate at 8% –<\/span><\/strong><\/p>\n

We first studied the situation of an ‘idealized’ transfer price<\/a> then presented the situation of a transfer price in a market State which applied a TAX\/VAT and CIT rate at 8%.<\/strong><\/a><\/span><\/p>\n

The reverse situation where it is the State of production which applied a TAX\/VAT and CIT rate at 8%<\/strong><\/a> in order to see the consequences on the fiscal results for the MNE and the States in the context of the DAGTVA tax system.<\/p>\n

Note<\/span>:<\/strong><\/span> the tab where a WSTAX of 10% is applied without any issue of fiscal competitiveness<\/a> on ‘Transac-base EN – 6<\/strong>‘<\/span> is not shown in the Excel file in reference.<\/p>\n

Obligations to find a mutualised and international solution which carry out the restitution of sale taxes in market States invite us to study this constraint that the production state must apply and use the framework of W<\/span>ayfair S<\/span>ale T<\/span>ax<\/strong> <\/em><\/span>in United States with an adaptation in the DAGTVA system.<\/p>\n

Go to the tab<\/strong><\/span> ‘Distrib 8% WST 4% EN – 9<\/strong><\/span>‘ of Excel. egalisation_des_taxes.xls(1)<\/span><\/a><\/p>\n

1 Note<\/span>: to have the correct opening of the file, please download the document on your computer, do not open directly.<\/span><\/em><\/p>\n

Application of a 4%<\/span> export WSTAX<\/em><\/span><\/strong> in D10<\/strong><\/span><\/span>.<\/span><\/p>\n

These 4%<\/strong><\/span> ( 4.062%<\/strong><\/span> rounded off) were not chosen by chance. They allow to obtain a rebalancing in the State of production and an almost perfect proportionality at 13.42%<\/strong><\/span> in D55<\/strong><\/span> and I55<\/strong><\/span> with a difference in F55<\/strong><\/span> at 0.00%<\/strong><\/span> in the \u201c\u00a0 Profit \/ Revenue ratio<\/em> \u00a0\u201d in the two States. It can be said that there will be less interest for an MNE to seek a tax advantageous State!<\/span><\/p>\n

We also see that the product sold at 3518<\/strong><\/span> with this low rate of WSTAX<\/strong><\/em> <\/span>at 4%<\/strong><\/span> begins to deviate at 5.71%<\/strong><\/span> nearby the high limit of the arm’s length principle which, in this context, has no longer any object, the market price having tendency, to the detriment of the subsidiary, to become uncompetitive with respect to the reference price.<\/p>\n

Some other consequences of this<\/span> WSTAX<\/strong><\/em><\/span> :<\/p>\n

Market State ‘B’<\/u> with a TAX\/VAT <\/strong><\/span>and CIT<\/span> <\/strong>rate at 8%<\/strong><\/span>\u00a0 :
\n<\/strong><\/p>\n