Tag: Digital Economy

TPG2022 Chapter VI Annex I example 7

TPG2022 Chapter VI Annex I example 7

16. Primero is the parent company of an MNE group engaged in the pharmaceutical business and does business in country M. Primero develops patents and other intangibles relating to Product X and registers those patents in countries around the world. 17. Primero retains its wholly owned country N subsidiary, Company S, to distribute Product X throughout Europe and the Middle East on a limited risk basis. The distribution agreement provides that Primero, and not Company S, is to bear product recall and product liability risk, and provides further that Primero will be entitled to all profit or loss from selling Product X in the territory after providing Company S with the agreed level of compensation for its distribution functions. Operating under the contract, Company S purchases Product X from Primero and resells Product X to independent customers in countries throughout its geographical area of operation. In performing its distribution functions, Company S follows all applicable regulatory requirements. 18. In the ... Read more
OECD releases statement on support of the two pillar tax plan - joined by 130 countries

OECD releases statement on support of the two pillar tax plan – joined by 130 countries

A OECD statement has been issued where 130 countries and jurisdictions have agreed to join and support the two pillar plan. A small group of 9 countries have not yet joined the Statement. “The two-pillar package aims to ensure that large Multinational Enterprises (MNEs) pay tax where they operate and earn profits, while adding much-needed certainty and stability to the international tax system. Pillar One will ensure a fairer distribution of profits and taxing rights among countries with respect to the largest MNEs, including digital companies. It would re-allocate some taxing rights over MNEs from their home countries to the markets where they have business activities and earn profits, regardless of whether firms have a physical presence there. Pillar Two seeks to put a floor on competition over corporate income tax, through the introduction of a global minimum corporate tax rate that countries can use to protect their tax bases. The two-pillar package will provide much-needed support to governments needing ... Read more
Facebook France has agreed to pay 106 million euros in back taxes and penalties

Facebook France has agreed to pay 106 million euros in back taxes and penalties

The agreement, according to which Facebook France will pay 106 million euros in back taxes and penalties, was reached after French tax authorities had carried out an extensive audit covering FY 2009-2018. Furthermore, Facebook’s French revenues were increased last year after the company decided to include advertising income from French companies in its local accounts, instead of declaring them in Ireland, where Facebook’s international operations are based. As a result, Facebook will pay 8.4 million euros in taxes in France this year – 50% more than last year. These changes are likely the result of efforts from the French government to have global online businesses pay more taxes locally ... Read more
US Investigations into Digital Service Taxes

US Investigations into Digital Service Taxes

Washington, DC – The United States Trade Representative announced today that his office is beginning investigations into digital services taxes that have been adopted or are being considered by a number of our trading partners. The investigations will be conducted under Section 301 of the 1974 Trade Act. This provision gives the USTR broad authority to investigate and respond to a foreign country’s action which may be unfair or discriminatory and negatively affect U.S. Commerce. “President Trump is concerned that many of our trading partners are adopting tax schemes designed to unfairly target our companies,” said USTR Robert Lighthizer. “We are prepared to take all appropriate action to defend our businesses and workers against any such discrimination.” US probe dig eco ... Read more
Unilateral Measures related to taxation of the Digital Economy

Unilateral Measures related to taxation of the Digital Economy

Imposed and proposed unilateral measures to adress taxation of the Digital Economy CountryMeasurePercentageDecriptionEffective data Czech Republic DST (Law on selected digital services tax)The Czech Ministry of Finance submitted a finalized proposal to the Czech Government on Sept. 5, 2019, which is now pending the Czech Parliament’s approval. Effective date: to be determined, but likely sometime in 2020. January 18 - The Czech government approved a 7% digital tax proposal on Monday aimed at boosting state coffers by taxing advertising by global internet giants like Google and Facebook, the Finance Ministry said. The proposed tax, which still must make it past lawmakers in parliament, covers revenue gained from targeted advertising, providing digital market places, and user data sales.? 2020 FranceDST (Tax on certain services provided by the enterprises of the digital sector)Enacted on July 11, 2019, and entered into force on July 26, 2019. Retroactive from January 1, 2019 IndiaEqualization LevyEqualization levy at a rate of 6% applies to persons making ... Read more
US response to OECDs Unified Approach

US response to OECDs Unified Approach

Letter from the US treasury to the OECD concerning the proposed Unified Approach on taxation of the Digital Economy, and the reply to the letter from the OECD. treasury-letter-oecd-digital-services-tax Letter-from-OECD-Secretary-General-Angel-Gurria-for-the-attention-of-The-Honorable-Steven-T-Mnuchin-Secretary-of-the-Treasury-United-States ... Read more
TPG2017 Chapter VI Annex example 7

TPG2017 Chapter VI Annex example 7

16. Primero is the parent company of an MNE group engaged in the pharmaceutical business and does business in country M. Primero develops patents and other intangibles relating to Product X and registers those patents in countries around the world. 17. Primero retains its wholly owned country N subsidiary, Company S, to distribute Product X throughout Europe and the Middle East on a limited risk basis. The distribution agreement provides that Primero, and not Company S, is to bear product recall and product liability risk, and provides further that Primero will be entitled to all profit or loss from selling Product X in the territory after providing Company S with the agreed level of compensation for its distribution functions. Operating under the contract, Company S purchases Product X from Primero and resells Product X to independent customers in countries throughout its geographical area of operation. In performing its distribution functions, Company S follows all applicable regulatory requirements. 18. In the ... Read more