Following multiple State aid investigations launched by the European Commission, the General Court of the European Union was asked to examine whether the advance transfer pricing agreements granted by Ireland, Luxembourg and the Netherlands were compatible with EU law.
A digitizing economy and an aging population are creating financial problems for governments and forcing them to look at the financing of public expenditure over the longer term. In other words, the sources of taxation. What is the solution? Robert van der Jagt, partner at KPMG Meijburg & Co, explains.
Most international businesses pay taxes via local offices (permanent establishments) on profits they realize in other countries. But in today’s digital economy there is often no such thing as a permanent establishment, despite the fact that products and services are sold in several countries, and customers create information that is valuable. Should the country where the customers are located therefore not also be able to tax part of the profits? Michael van Gijlswijk, partner at KPMG Meijburg & Co, explains these developments in more detail.
The current tax system is no longer adequate because it is not designed for digital business models like Airbnb, Uber, or Amazon. This gives rise to international tax debates, which sometimes raise the question whether we should fall back on ‘old-fashioned’ tax systems. Digital technology, the virtual presence, is new. However, the fundamental cornerstone of taxation - where profits are realized - is not. Even in the Dutch colonial era, a pertinent question was which part of the profits of multinationals could be attributed to the Dutch East Indies and taxed there. Fred van Horzen, partner at KPMG Meijburg & Co, explains.
On November 8, 2018, the groundbreaking judgment that the Court of Appeal in Amsterdam had rendered on the VAT exemption for the management of special investment funds (SIFs), was published.
