engleski

Proposals for reform of the agency permanent establishment concept: examination of BEPS Action 7

Authors of this paper explore recent proposals to reform the concept of permanent establishment (PE), which underlies the allocation of the rights to tax cross-border income between countries. The focus is on one specific form of PE, the so-called dependent agent PE (DAPE). Main motivation for the reforms of DAPE-related provisions found in tax treaties is the widespread usage of commissionaire arrangements by MNCs, which result in the erosion of the tax base of countries that provide markets to their products and services (destination countries). Paper will explore how OECD aims to tackle this issue, as part of its comprehensive project on base erosion and profit shifting (BEPS). It will be suggested that the reform of DAPE definition is neccesary in the light of new economic realities.

international tax law, permanent establishment, dependent agents, BEPS project, tax planning, commissionaire arrangements

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