The OECD’s latest digitalisation consultation could impact every multi-national. Increasingly, focus is on allocating ‘marketing intangibles’ to ‘customer’ territories however ‘digital’ a multi-national is. Many believe this is the only way to meet society’s concern on the growing remoteness of big business.
Beware the impact: consider the explosion of dispute/double tax if every market authority could audit their share. Some are suggesting a formulaic approach is the only way to mitigate the complexity. Can this avoid anomalies and what’s the price of abandoning the arm’s length principle?
Governments’ actions suggest a belief they will each be net winners. Can they all be right? Are some relying on this being a supplement to withholding, digital and other IP taxes? Shouldn’t a new means of taxing market intangibles replace these?
What’s clear is that the decisions taken will have a profound impact on all multi-nationals. Now’s our chance to shape this debate.