Oecd tax alert 7 october 2015 : beps action 7: preventing the artificial avoidance of pe status the g20/oecd and other governments will be continuing their work on • tightening the agency pe rules to include not only contracts in the name. Permanent establishment under the oecd model tax convention the concept of permanent establishment under the article 5 of oecd convention so according to the oecd commentary on paragraph 5, persons who can create ‘agency pe’ are either individuals or companies.
Organisation for economic co-operation and development interpretation and application of article 5 (permanent establishment) of the oecd model tax convention.
An agency permanent establishment, through the actions of a dependent agent (article 5(5-6)) the un model tax convention, which gives greater consideration to developing countries, adds what is known by service permanent establishment in article 5(3)b [4. Such complacency was destroyed by the pressures that gave rise to the beps project and amendments proposed in action 7 are aimed at changing the meaning of agency pe in article 5(5) of the oecd model to capture commissionaires within that article. The oecd intends to hold a public consultation on the additional guidance on the attribution of profits to permanent establishments on 11-12 october 2016 at the oecd conference centre in paris, france.
Under the current oecd model tax convention, in general terms a pe could arise in the following two circumstances: where there is a fixed place of business through which the business of the non-resident company is carried on and.
Don’t get blindsided by agency pe understand the law’s nuances or seek the advice of someone who does — or else risk creating a taxable presence where you don’t want one join hundreds of global business leaders who receive weekly international expansion updates and need-to-know global information.
Oecd releases proposed changes to permanent establishment rules authority to conclude contracts in the name of the enterprise (agency pe) both the fixed place pe and agency pe are subject to a general exemption for certain activities that could be described as being of a preparatory or auxiliary nature (the specific activity exemptions. Rules on agency-pe allows contracts for the sale of goods belonging to a foreign enterprise to to sales of goods and services cannot be used to avoid pe status in october 2013, the oecd invited all interested parties to contribute examples of strategies.