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Published on July 21, 2016
On 4th July 2016, the OECD published a discussion draft that contained additional guidelines on the attribution of profits to Permanent Establishments (”PE”). The draft deals with work in relation to BEPS Action 7 (”Preventing the Artificial Avoidance of Permanent Establishment Status”). At this stage, the solutions and opinions presented in the draft cannot be considered as an agreed viewpoint of the OECD. The OECD has submitted the draft for public discussion. It is expected to prompt a debate on the attribution of profits to PEs and to find solutions together with concerned parties.
The published discussion draft focuses on two fact-patterns which in the opinion of the OECD would particularly benefit from additional guidance concerning attributions of profits to PEs.
As mentioned above, the OECD's draft has been submitted for public discussion as follow-up work on Action 7 to meet the need for additional guidance on how the rules of Article 7 would apply to PEs. Comments and remarks to the draft can be sent until 5th September 2016. Then, on 11th–12thOctober 2016 the OECD intends to hold a public consultation on the additional guidance on the attribution of profits to PEs.
Dominika Tyczka-Szyda
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