Tax
You will find insights on various topics by our Forvis Mazars tax professionals. For more information, please contact Gene Kwee, our Head of Tax and Elaine Chow, Partner in Tax.
OECD has recently provided guidance (the multilateral convention) on how Amount A will be calculated. These rules would apply to multinational enterprises with revenue above EUR 20 billion and profitability above 10%. 25% of the profit above 10% of revenue is to be reallocated to market jurisdictions with certain quantitative revenue thresholds. Extractives and regulated financial services will be excluded so generally almost all multinationals will be included. The rules to determine and compute Amount A are complex.
A single tax return with standardized documentation is to be filed with one tax administration that would typically be the parent jurisdiction of the multinational enterprises.
The convention must be ratified by at least 30 jurisdictions accounting for at least 60% of the ultimate headquarter jurisdictions of multinational enterprises expected to be in scope for Amount A. The ratified jurisdictions can then decide when the convention will enter into force. Signing the convention requires that country to remove existing digital services taxes (“DST”).
The impact on BEPS Pillar One on multinational enterprises vary and several factors need to be considered:
This is a developing story and multinationals that are or potentially in scope should watch this space. How can Mazars help?
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