Proposal for a Global Taxation System
– DAGTVA truth table –
DAGTVA® – Distribution of MNE profits
| No. | Problems exposed, requests, constraints and subjects | Origin | Pg | Li | Doc |
| 60 | Qe – problematics treatment of losses, and determination of location. | Pillar 1 | 9 | 45 | RBQpt |
Quote : 2.5. Pending key questions
32. A number of the areas in which further work would be required are already covered by the Programme of Work. These include work on the possible use of business line or regional segmentation (RBQrb), issues and options in connection with the treatment of losses, and the challenges associated with the determination of the location of sales (RBQpt). Some of this work is already underway.
As specified in the previous page RBMcf ,RBQrb « With the taxation defined on a transactional system, the turnover achieved in each jurisdiction by an MNE would be recorded to the nearest cent, there would be no supposed activity of the local entity that would not be taxed. As is explained in several sections including the RBMbr page which said below: »
« With the precision of the transactional system and the DAGTVA transfer pricing calculation, the notion of a necessarily approximate fixed compensation has no justification , as explained in the previous section RBMap dedicated to the“Amount A” option. »
To add and follow the transactional tax system as defined by the DAGTVA transfer pricing calculation, each jurisdiction will calculate very precisely the tax share of an MNE entity based on the business activity it has declared and which will also have been declared in the destination’s jurisdiction of the transaction.
With these possibilities, losses are taken into account as much as profits but, as is specified in several sections, with a count that will be done by each jurisdiction and not in a global way.
See also RBPpi section for further details.
**********