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Overview. As discussed in prior blog posts,
Amount A is a proposed new taxing right over a share of residual
profit of MNE groups that fall within its defined scope. The
calculation and allocation of Amount A will be determined through a
formula that is not based on the Arm s Length Principle (ALP).
The formula will apply to the tax base of a group (or segment where
relevant) and will involve three components: Step 1: a
profitability threshold to isolate the residual profit potentially
subject to reallocation; Step 2: a reallocation percentage to
To print this article, all you need is to be registered or login on Mondaq.com.
As discussed in prior blog posts, Amount A is a proposed new
taxing right over a share of the residual profit of MNE groups that
fall within its defined scope. The tax base is therefore determined
on the basis of the profits of a group (rather than on a separate
entity basis), and it is necessary to start with consolidated group
financial accounts.
Comment: As discussed in prior blog posts, the reliance
on consolidated financial statements in computing Amount A is a
novel concept. Many taxing authorities are likely to view reliance
GENEVA, Feb 16 2021 (IPS) - The United Nations Committee of Experts on International Cooperation in Tax Matters (UN Tax Committee) is an important and influential subsidiary body of the Economic and Social Council (ECOSOC) that shapes standards and guidelines on international taxation. These are the rules through which Multinational Enterprises (MNEs) are taxed.
Its role post-COVID has become even more important as countries struggle to raise revenue. Despite being under-resourced, it has produced valuable guidance, especially on the crucial question of the digital economy. As a new Membership of the Committee is about to be selected, this brief provides practical recommendations on how the Committee can be reformed to be made more effective, especially for the interests of developing countries.
Joint EACH/ECSDA/FESE Letter To OECD On Its Consultation On Pillar 1 Blueprint Date
15/12/2020
The European Association of CCP Clearing Houses (EACH), the European Central Securities Depositories Association (ECSDA) and the Federation of European Securities Exchanges (FESE) co-signed a letter in response to the OECD consultation on Pillar 1 Blueprint. The purpose of the letter is to provide supplementary information relevant to the position set out in our previous correspondence with the OECD on the 22 October 2019 and restate why we believe that Trading Venues (TVs), Central Counter Parties (CCPs) and Central Securities Depositories (CSDs) should be specifically excluded from the payment of a taxing right for market jurisdictions over a share of residual profit calculated a MNE (multinational enterprise) group (or segment) level (“Amount A”).