Five Core Problems in the Attribution of Profits to Permanent Establishments

• Autores: Richard Collier, John Vella
• Localización: World Tax Journal: WTJ, ISSN-e 1878-4917, Vol. 11, Nº. 2, 2019, págs. 159-187
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • The rules regulating the attribution of profit to permanent establishments (PEs) are a fundamental feature of the existing international tax system yet are beset by a multitude of problems. This article identifies five “core” problems with these rules: (1) the absence of a single standard for PE profit attribution; (2) conceptual and practical problems arising in the application of the Authorised OECD Approach; (3) new pressures arising as a result of the changes made to the PE threshold rules by the BEPS Project; (4) the failure to deal with the uncertainties between the transfer pricing rules and the PE attribution rules in the aftermath of BEPS; and (5) a raft of new challenges arising from the work on the digitalization of the economy. To a large degree, these issues are symptomatic of the problems faced by the international tax system as a whole. This article analyses the source, nature and impact of these core problems, before concluding with some brief thoughts on potential solutions.