jpost.com
MLI's Impact on Israeli E-commerce SMEs
The OECD Multilateral Instrument (MLI) amends bilateral tax treaties, impacting Israeli SMEs exporting goods or services by potentially creating taxable permanent establishments in numerous countries, leading to increased tax obligations.
- How do Articles 12 and 13 of the MLI specifically affect Israeli exporters operating in countries with which Israel has signed the MLI?
- The MLI's Articles 12 and 13 are particularly relevant. Article 12 expands the definition of a taxable PE to include commissionaires and subsidiaries acting mainly for related entities. Article 13 restricts the exclusion of PEs for preparatory activities, such as warehousing, impacting fulfillment houses.
- What are the potential long-term economic consequences of the MLI on the competitiveness of Israeli SMEs in international e-commerce markets?
- The MLI's impact on Israeli SMEs could lead to double or triple taxation due to overlapping direct and indirect taxes, significantly reducing profit margins. Businesses need to carefully examine the nexus rules of each country, consider passing on indirect taxes, and potentially adjust their business models to mitigate these increased tax burdens.
- What are the main implications of the OECD Multilateral Instrument (MLI) for Israeli small and medium enterprises (SMEs) involved in e-commerce?
- The OECD Multilateral Instrument (MLI) is a tax treaty amending existing bilateral tax treaties, impacting online e-commerce traders by potentially creating taxable permanent establishments (PEs) in more countries. For Israeli SMEs, this means increased tax obligations in various jurisdictions where they export goods or services.
Cognitive Concepts
Framing Bias
The headline and introduction immediately set a negative tone, focusing on the challenges and potential negative impacts of the MLI on Israeli SMEs. While the article does present factual information, the framing predisposes the reader to view the MLI negatively. The emphasis on potential double taxation and high tax burdens in the conclusion reinforces this negative framing.
Language Bias
The article uses strong, negative terminology such as "super tax treaty," "tighten up," "catch commissionaires," and "opens up the books to local tax scrutiny." These terms create a sense of apprehension and negativity. More neutral terms could have been used to maintain objectivity. For example, instead of "catch commissionaires," the article could state, "clarify the tax treatment of commissionaires.
Bias by Omission
The article focuses heavily on the implications of the MLI for Israeli SMEs, particularly in e-commerce. However, it omits discussion of potential benefits or alternative interpretations of the MLI's impact. It also doesn't explore the perspectives of other OECD member countries or the experiences of businesses outside of Israel. While acknowledging space constraints is valid, a brief mention of these missing perspectives would improve balance.
False Dichotomy
The article presents a somewhat simplified view of the challenges posed by the MLI, emphasizing the potential for high tax burdens without fully exploring potential mitigation strategies or variations in implementation across different countries. It implicitly frames the situation as a problem without fully exploring solutions or the possibility of positive outcomes from the MLI.
Sustainable Development Goals
The OECD Multilateral Instrument (MLI) impacts small and medium enterprises (SMEs) by potentially increasing their tax burden through the creation of permanent establishments (PEs) in various countries. This can disproportionately affect smaller businesses with fewer resources to navigate complex international tax regulations, exacerbating existing inequalities between large and small businesses. The increased tax liabilities may hinder their growth and competitiveness compared to larger corporations.