On March 22, 2018 the OECD released a report providing additional guidance on the attribution of profits to permanent establishments (BEPS Action 7).

The report contains additional guidance on the attribution of profits to permanent establishments resulting from the changes in the Report on BEPS Action 7 to Article 5 of the OECD Model Tax Convention. The additional guidance sets out high-level general principles for the attribution of profits to permanent establishments arising under Article 5, Paragraph 5, in accordance with applicable treaty provisions. It also includes additional guidance related to permanent establishments created as a result of the changes to Article 5, Paragraph 4.

 

A.o. the following topics are discussed in the report:

·   Attribution of Profits to Permanent Establishments resulting from changes to Article 5(4) and the Commentary

o  Example Illustration the Attribution of profits to Permanent Establishments under Article 5 (4) (Warehousing, Delivery, Merchandising and Information Collection Activities)

·   Attribution of profits to permanent Establishments resulting from changes to Article 5(5) and 5(6) and the commentary

·   Attribution of Profits to Permanent Establishments resulting from changes to Article 5(5) and 5(6) and the Commentary

o  Administrative approaches to enhance simplification

o  Examples Illustrating the Attribution of Profits to Deemed Permanent Establishment under Article 5(5)

§   Commissionnaire structure (related intermediary)

§   Sale of advertising on a website (related intermediary)

§   Procurement of goods (related intermediary)

 

Click here to be forwarded to the report providing additional guidance on the attribution of profits to permanent establishments (BEPS Action 7) as released by the OECD on March 22, 2018.

 


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