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Improving Domesting Recource Mobiulization
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- 2. 2 Document Classification: KPMGConfidential © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Whatisjustice? ‘Justice … prompts us to give the other what is ‘his’, what is due to him by reason of his being or his acting’ (Caritas in veritate para 6) “ “
- 3. 3 Document Classification: KPMGConfidential © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Whatisduetotheotherasregardstax? 2 ‘Tax is the entrance fee we pay for a civilised society’ (Jane McCormick, Global Head of Tax, KPMG) 1 ‘Tax is theft’ 3 ‘Tax is vital to fund the public services and infrastructure that are critical to societies’ (B Team Responsible tax principles)
- 4. 4 Document Classification: KPMGConfidential © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Whatdoesitmeantopaywhatisdue? Tax as a legal and moral/ethical issue 03 ‘Spirit of the law’ 02 ‘As long as it’s legal you can do it’ 01
- 5. 5 Document Classification: KPMGConfidential © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Businesschoice:Debtfinancing Country A Country B Head office Subsidiary Tax is only one consideration in financing No (limited) tax Dividends Interest payments on a loan No deduction Deduction
- 6. 6 Document Classification: KPMGConfidential © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Judgementrequired:Transferpricing Country A Country B Manufacturer Distributor Internal sale Sale to customers Transfer pricing rules say sale must be for at least $80 Transfer pricing rules say purchase must be less than $100 How to set the price between $80-$100?
- 7. 7 Document Classification: KPMGConfidential © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Governmentincentivesandchangingnorms Can/should the MNE still use Mauritius? Developed country Mauritius Developing country Parent Finance company Subsidiary 0% WHT 15% WHT
- 8. 8 Document Classification: KPMGConfidential © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Howaretaxjudgements made? ‘Tax is a business expense which needs to be managed, like any other, and therefore businesses may legitimately respond to tax incentives and statutory alternatives offered by governments’ (BIAC Tax Principles) ‘We will not undertake transactions whose sole purpose is to create a tax benefit which is in excess of a reasonable interpretation of relevant tax rules’ (B Team) ‘Today it is clear that without gratuitousness, there can be no justice in the first place.’ (Caritas in veritate, para 38) 1 2 3
- 9. 9 Document Classification: KPMGConfidential © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Responsibletaxiseveryone’sbusiness For more information see www.responsibletax.kpmg.com Supra- natural bodies Academics Press Public Tax authorities Business Policy makers Civil society Government
- 10. 10 Document Classification: KPMGConfidential © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. contactdetails Christopher Morgan Head of Global Tax Policy T: +44 (0)20 7694 1714 E: christopher.morgan@kpmg.co.uk
- 11. Document Classification: KPMGConfidential © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. | CREATE: CRT110730A kpmg.com/socialmedia