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Read our decryption: The fight against tax evasion pays off
Accurate, because it attacks the gray area of tax planning, that is to say, these legal instruments Tax (Transfer Pricing in a group called “hybrid” products, that is to say, complex …), but diverted from their purpose or overused by large companies to pay no taxes anywhere.
AN AMBITIOUS
Accurate too, because it attacks the practices deemed unfair to these large groups. Including treaty shopping, which is to select the countries best-called tax, in order to domicile or headquarters to house some investment or financial operations. The stars of the digital economy groups (Google, Apple, Starbucks, Amazon …), which the OECD’s also a special report, include targeted.
This plan is also ambitious in will have to be translated into laws and acts around the world, overcoming resistance speaking in countries with low or no taxation, and that made the reception of a multinational business case and a competitive advantage in particular Ireland, Luxembourg, Switzerland … or the UK.
THE UNITED STATES WANT TO GRADUALLY MOVING
According to Reportedly, it has also weighed during the development of this plan and discussions in recent months between the great powers, and alongside the Netherlands and Luxembourg, that are not stigmatized the famous ” patent boxes “- these tax regimes including generously offered across the Channel, which allow a company exploiting patents benefit from significant tax breaks
Meanwhile, the United States, under the constant pressure. a particularly powerful industrial lobby, stressed the need to move gradually.
Of the fifteen steps (very technical) unveiled Tuesday, and that should be acclaimed at the upcoming international summits planned for Australia ( G20 finance ministers Cairns on 20 and 21 September and the G20 Heads of State and Government on 15 and 16 November), four of them, the most important and serious impact, deserve special focus .
- Publication of information country by country (English, reporting )
The OECD wants to require multinational companies to transmit to the tax authorities of the countries where they operate, details, country by country: their sales, profits, assets, their workforce, taxes paid …
A significant step towards transparency – and the ability to control, so – which could be accompanied by a report in 2020
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Fight against treaty shopping (English, treaty shopping )
The OECD wants to end the practice of treaty shopping (by investors who want to avoid withholding taxes) and other strategies misuse of tax treaties between States themselves, which underlines the international organization, depriving the country of revenue.
In other words, it is to incorporate anti-abuse rules in tax treaties to prevent territories engage them harmful tax competition with advantageous tax status too
The OECD admits, however, that certain types of tax instruments “adapted to the particular situation [State] ” can be used, so as not to impede investment and growth. The “patent boxes” have in this case.
- Neutralization of montages called “hybrid”
The OECD proposes a model of tax law that could end the abuse of hybrid products.
Used by major companies to artificially underestimate their tax bills, these financial products have grown exponentially in recent years.
They shall be put in place between the parent companies and their subsidiaries, with the sole aim to take full advantage of the tax benefits attached to them. For example: sale of bonds convertible into shares of a parent company to a highly profitable subsidiary, which results in a double tax deduction, the subsidiary deducting taxes and interest payments to the parent company receiving its share of dividends not taxable.
- Reforming transfer pricing (for intangibles)
The OECD wants to reform a system completely rogue who sees some major groups set up subsidiaries in offshore jurisdictions without tax (primarily in Bermuda or the Cayman Islands), in order to develop a new product, actually designed by teams of research and development within the parent company.
These subsidiaries are devoid of real economic activity.
- Going fast on the timing of implementation
The OECD recommends to hire seven of the fifteen measures in 2014, the other eight in 2015
Among the main measures to be adopted in 2014 include:. adoption of new international standards for neutralize hybrid assemblies; alignment of the tax rules on the economic substance of business (for the tax to be paid where it should be due); reform transfer pricing so that they are calculated according to the value creation (for intangibles)
See also (in edition subscribers). Optimisation Tax: policies to the wall
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