Get support from A&P

Permanent Establishment: how the OECD intervened

Focus concentrated on the avoidance of the status (art.12-15), exemptions for specific activities and the anti-fragmentation rule.

Table of Contents

We are based in Italy

Chartered Tax Advisors

Quality ISO 9001 Certified

The Beps project

The Base erosion & profit shifting (Beps), created by the OECD, is a project born with the aim to build an integrated fiscal system between the States, promoting common measures, and trying to remove fiscal avoidances, with the tool of the multilateral convention. The single state will then approve the convention with a confirmation law, introducing the new Beps measures in the country’s system. Regarding the permanent establishment, the focus was concentrated on the avoidance of the status (art.12-15), exemptions for specific activities and the anti-fragmentation rule.

The main problem with this method is its flexibility, since every state can decide not to apply certain aspects of the treaty, creating uncertainty on the width of the application of these measures, although some minimum standards were set. The multilateral convention was implemented from 1st July 2018, with 65 countries that already confirmed their acceptance.

Get a Free Quote

Regulatory Framework

Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting

Reference 

Don't miss out on the latest updates

Get free updates from our Experts on Immigration, Posting Workers, International Taxation and more.