Volume 47 (2019) / Issue 12
Under the first pillar, focused on the allocation of taxing rights including nexus issues, several proposals have been made that would allocate more taxing rights to market or user jurisdictions in situations where value is created by a business activity through participation in the user or market jurisdiction that is not recognized in the framework for allocating profits. … Some of the proposals would require reconsidering the current transfer pricing rules as they relate to non-routine returns, and other proposals would entail modifications potentially going beyond non-routine returns. In all cases, these proposals would lead to solutions that go beyond the arm’s length principle (OECD, Addressing the Tax Challenges of the Digitalisation of the Economy – Policy Note, OECD/G20 Base Erosion and Profit Shifting Project 2 (OECD Publishing Jan. 2019). See also, the G20, G20 Leaders’ Declaration: Building Consensus for Fair and Sustainable Development, Buenos Aires Summit (1 December 2018), paragraph 26).
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