It sells in 70 countries, of which it has subsidiaries in 50 countries (physical presence) and sells remotely in the other 20 countries (no physical presence). Routine profit will be allocated to the 50 countries having physical presence.This may consume $8 billion of the profits. Then why should the ‘routine profits’ also not be allocated to countries where there is no physical presence? Once we have a tax nexus, profits must be allocated to that nexus, regardless of whether they are ‘routine’ or ‘residual’. These unilateral measures can go once a consensus is reached on global tax rules, bringing certainty for digital companies.

Source: Economic Times October 20, 2019 17:26 UTC