OECD prepared a set of provisions to annual tax advantages for internet multinationals

31.03.2014

Proposals have been introduced by OECD; the final project of the Act will be ready for the September 2014. OECD published proposals how to make international digital business to pay corporate taxes in jurisdictions where the sales take place.

Current legislation makes possible for internet companies legally avoid taxation by using corporate structures for shifting profits to low-tax jurisdictions. The project of OECD proposed some measure:

•  An implementation of new taxation criteria based on “significant digital presence”, which will be as a basis with a view to activeness of the companies.
•  Changes to model tax agreements that exempt business premises from permanent establishment status.
•  Introduction of withholding taxes for digital transactions.

Final report is expected in September 2014

Based on :

http://www.oecd.org/ctp/tax-challenges-digital-economy-discussion-draft-march-2014.pdf

Expert’s opinion

Decisions upon accounting of the income in places of their obtaining – is very a tidbit for taxmen. And it is clear that they fight for taxes of multinational corporations.

Such ideas look very difficult executable from the technical point of view. Naturally - it is possible to adopt such laws which will simply physically forbid work to multinational companies. So it is easy to abate the work. But until the taxes won't be lowered to acceptable levels - tax optimization will live and prosper.

To pay taxes shall be easier, than to make schemes of tax optimization 

Yaroslav Lomakin ( Managing partner of Honest & Bright” company)