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.

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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.

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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.

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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.

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We have made a submission, available here, to the consultation by Fiscal Affairs Department of the International Monetary Fund for their analysis of international corporate taxation.

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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.

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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.

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We have made a submission to the Platform for Collaboration on Tax’s consultation on the revised version of its proposed Toolkit on the taxation of sales of assets using offshore entities. Our submission, available here, restates and reinforces the argument that the Toolkit should not be tied to the archaic legalistic distinction between immovable and movable assets, but should include the transfer of a business as a going concern, treated as transferring location-specific assets.

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The BEPS Monitoring Group has made a submission to the OECD consultation on the Transfer Pricing Aspects of Financial Transactions. It is available here, and suggests that the draft should have more urgency given the key role that financial structures play in tax avoidance by MNEs, as pointed out in the BEPS Action 4 report. Regrettably, the recommendations in that report would still allow excessive deductions for most MNEs in most industry sectors, so that strong transfer pricing rules will remain important, and we argue for simplified methods that would be both effective and easy to apply.

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