|
By Oliver R. Hoor and Keith O’Donnell, Atoz*
The main purpose of the PE concept under the OECD Model Tax Convention (“OECD-MC”) is to determine whether a Contracting State has the right to tax the profits of an enterprise that is resident in the other Contracting State. According to Article 7 of the OECD-MC, a Contracting State cannot tax business profits of enterprises resident in the other Contracting State unless it carries on its business through a PE located in its territory.
The history of Article 7 of the OECD-MC and the related definition of PE provided in Article 5 of the OECD-MC dates back to the work of the League of Nations in the 1920s.(1) From the very beginning, the term PE has been at the heart of the discussions on the attribution of...
|