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November 4, 2012 5:33 pm
As international tax avoidance has risen up the political agenda, debate about multinationals’ tax arrangements has been intensifying at an international level.
The difficulties in taxing internet companies have provoked some governments into exploring new approaches. France proposed a 1 per cent tax on online advertising revenue but dropped it last year because of concerns about the impact on small companies.
Bill Dodwell of Deloitte, professional services group, says the only credible approach would involve licenses and a turnover tax, similar to the approach applied to online gaming. He said: “You need an element of international agreement otherwise your consumers are paying a higher price than elsewhere and would buy through intermediaries.”
The Paris-based Organisation for Economic Co-operation and Development, responsible for international tax rules, is tightening the rules on intellectual property to make it harder for multinationals to site their intellectual property, brands, trademarks and know-how in tax havens where there is no genuine business.
It says: “Many are questioning the fact that most multinational enterprises, and in particular those that are intellectual property-intensive, have effective tax rates dramatically lower than the statutory rates of the countries in which they operate. Debt-laden governments – in Britain and across the world – are putting it under pressure to find solutions to what it describes as the “aggressive strategies” undertaken by multinationals.
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