If the new guidelines announced last October XNUMX by the OECD had been operational, the FCA and Starbuck cases would not have occurred. Or at least not as badly. “The new rules on transfer pricing make it clear that the underlying reality, where the income is actually produced, has much more weight on taxation than the contractual form. All of this to make sure the tax outcomes are in line with economic reality,” he explained to FIRSTonline the lawyer Raffaele Russo, responsible of Beps project on the sidelines of the conference organized yesterday in Milan by Ludovici&Partners “Beps, from vision to reality”. “Furthermore, with the new rules, countries will have to exchange information on rulings that have an impact on the tax base of other countries. This will certainly lead to greater knowledge of what these multinationals are doing, allowing administrations to move accordingly".
Multinationals and tax havens
Il Beps project (Base erosion and profit shifting) was born within the OECD on a mandate from the G20 with the aim of avoiding the phenomenon of double non-taxation which has allowed the various multinationals, let us also think of the cases Google and Amazon to give two other examples, to make profits with activities scattered around the world but to optimize the corporate structure in order to pay taxes in those countries where taxation had undoubted advantages. The result, it is estimated, is between 100 and 240 billion dollars in unpaid taxes.
"With the new rules it will be more difficult for companies to assign risk and income to low-tax countries without corresponding real economic activity - said Joseph L. Andrus, former head of transfer pricing at the OECD - The same thing for the treatment of intangibles. Indeed, until now, multinationals were able to place intangibles in one country and the underlying assets in another. With the new rules, the production of income must have a relationship with the place where the activity linked to the intangibles is carried out”. In other words, it will no longer be possible to be taxed in Bermuda and produce value in Italy. Another matter if a company chooses to establish its real economic activities in Bermuda.
New rules, the circle tightens
The 15 guidelines elaborated will be ratified in the next one summit of heads of state in Türkiye on 15 November becoming final. Then they will have to be implemented by the individual states. And it is in this passage that the greatest pitfalls can be hidden.
“The impact for Italy is difficult to estimate precisely. According to OECD estimates at global level we are talking about a range between 100 and 240 billion dollars”, said Fabrizia Lapecorella, Director General of Finance of the Ministry of Economy and Finance. "In Italy some provisions are already in line with the work of the OECD but there are areas in which we need to intervene". Among the aspects still to be implemented there are, for example, the rules on country reporting, one of the major revolutions envisaged by the BEPS guidelines, which basically provides that multinationals publish a report every year explaining where the group's profits come from.
“According to the stability law – continued Lapecorella – the Government has chosen to focus on economic policy measures with a direct impact on the budget. Therefore, procedural rules such as the one that would have introduced the country-by-country reporting obligation for multinationals residing in Italy, in line with international commitments, have remained outside the text. The administration will work in recent months to ensure that these rules are included in the process of conversion into law, since it is an extraordinary revolution that will give the administration new and powerful information tools useful for combating international tax avoidance ”.
In short, the circle seems to be destined to close more and more around those who choose aggressive fiscal policies. Which will end up sooner and faster under the eyes of the administration. Thanks to country reporting in fact, it will immediately catch the eye if a multinational has only two employees in the Caymans but then declares 60% of its income there.
