A permanent establishment, as clarified in article 5 of Oecd convention, and then introduced in art. 162 of Tuir, is “a fixed place of business, through which the business of an enterprise is wholly or partly carried on”. Recently, following an update of the Oecd document, a few news were introduced to prevent the avoidance of the status, like the “anti-fragmentation rule”.
When some kind of business is run from one or more linked companies, a permanent establishment happens if these are linked and complementary, except for preparatory or support businesses. To adapt to these new standards, in addition to the implementation of the anti-fragmentation rule, Italy modified art. 162 Tuir, adding new type of permanent establishment (the so-called “digital permanent establishment”) and removing cases which excluded the permanent establishment (electronic calculators used to collect data and transfer information regarding the trade of goods). It has been also introduced a “negative list” with the activities unrelated to a permanent establishment.
A&P Office remains at your disposal for further details.