Negotiations in the BEPS project are now reaching a crucial stage, with an intensification of work to revise the basic principles of international tax. This report aims to analyse the various proposals involved, putting forward our own suggestions, and also to explore some unilateral measures that may be considered by developing countries.Read More
We have submitted comments, available here, to the OECD on a document issued for public consultation on this subject.
We are surprised that this draft ignores the issue of tax fairness, which is central to tax morale. We also consider it inappropriate to include the data from an earlier survey of business attitudes towards tax certainty, and suggest other sources of evidence about business motivations towards paying tax would be more appropriate.Read More
We have submitted comments on the proposal from India’s Central Board of Direct Taxes to amend the rules on attribution of profits to a permanent establishment, available here.
We commend the CBDT on this proposal, that would introduce a fractional apportionment method for allocation of MNE profits, and provide simplicity, predictability and fairness. Our comments include suggestions for complementing these measures with strengthening of the profit split method for allocation of MNE profits to subsidiaries. This approach offers a roadmap for comprehensive reforms currently debated internationally.Read More
We have made a submission to the Global Sustainability Standards Board on their proposed standard on Tax and Payments to Governments, available here.
The standard is very similar to the template for Country-by-Country reporting developed for the G20/OECD BEPS project. Once adopted, it would enable multinational enterprises to make their reports public, thus greatly improving tax transparency.Read More
We propose a combination of principles and pragmatism that will provide (i) results that are fair to both taxpayers and tax authorities, and (ii) true simplicity of application.Read More
The BMG has submitted comments to the UK Treasury on its proposal for a Digital Services Tax, available here..
While there is a great need to remedy the defects of the international tax system, exacerbated by digitalisation of the economy, in our view this proposal is flawed. It is ring-fenced, and would apply only to some types of highly digitalised business models. Defining the taxable revenues by reference to user contributions would create major boundary problems, requiring firms to attempt to segregate revenue streams artificially. A multilateral solution would need to take a broader approach and should not target only once aspect such as user contributions.Read More
We have made a submission, available here, to the consultation by the Indian Government on the definition of a new tax threshold based on significant economic presence. We support this initiative, as revisions are sorely needed to rules now a century old, and we endorse the criteria chosen in India, which rest mainly on transactions producing revenue from India, as well as systematic and continuous solicitation of business or engagement with users in India.Read More
We have made a submission to the Subcommittee on Article 9 (Transfer Pricing) of the UN Committee of Tax Experts, available here. We suggest that it should focus on article 9 and develop alternatives to the OECD’s approach that focuses on transactions and functional analysis and is subjective and resource-intensive, creating problems for both taxpayers and revenue authorities, especially in developing countries.Read More