Big multinationals such as Google and Facebook don’t pay taxes in the countries where they make their money, but in the countries with the lowest tax tariff. The OESO came up with a plan to create more competence to tax. Peter Kavelaars, Professor of Economics of Taxation, explains what the plan includes.
The OESO wants to tax at the place of sale not of settlement. Difficulties occur mostly for internet companies. They ship worldwide, but don’t have an establishment in the country shipped at so no taxes are payed there. Plan is to impute profits to the country where revenues are achieved, using a fictional establishment and an allocation scheme.
Big countries as the United States are not excited to cooperate. They are competent to tax in the current situation and see this money disappear. For a small country as the Netherlands the measure will be beneficial.
Kavelaars considers the chance that the plan will come through likely, but not on the short-term.
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Listen to the entire item on BNR Nieuwsradio, 9 October 2019 (in Dutch).