We appreciate the draft prepared by the former Co-Lead, as well as the opportunity to provide feedback. A full article-by-article analysis of the text is available on our website; here, we focus only on what we consider the most important points in the current draft.
We highlight the importance of keeping a broad scope of covered taxes. We also propose that the Meeting of the Parties should be granted interpretative power over the definitions. We propose that further work on net formulary or fractional apportionment approaches is required to align the protocol with the commitment to a fair allocation of taxing rights.
We suggest that, for the article on automated digital services to be future-proof, its scope should be interpreted in an open-ended way, and that more attention needs to be directed to the attribution of profits in non-payment situations. We raise concerns about risks in the current Article 9, including the discretionary power given to taxpayers to choose their preferred method, the need to refer to the profitability ratio of the multinational group as a whole, and the need to better specify a reasonable allocation of profits.
We propose that the clause on exchange of information should make explicit the information that will be needed to implement the protocol. Finally, we propose that the protocol should not defer its implementation to bilateral renegotiations.