OECD/G20 Base Erosion and Profit Shifting Project

2313-2612 (online)
2313-2604 (print)
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Addressing base erosion and profit shifting is a key priority of governments around the globe. In 2013, OECD and G20 countries, working together on an equal footing, adopted a 15-point Action Plan to address BEPS. Beyond securing revenues by realigning taxation with economic activities and value creation, the OECD/G20 BEPS Project aims to create a single set of consensus-based international tax rules to address BEPS, and hence to protect tax bases while offering increased certainty and predictability to taxpayers. In 2015, the OECD and G20 established an Inclusive Framework on BEPS to allow interested countries and jurisdictions to work with OECD and G20 members to  develop standards on BEPS related issues and reviewing and monitoring the implementation of the whole BEPS Package.

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Preventing the Artificial Avoidance of Permanent Establishment Status, Action 7 - 2015 Final Report

Preventing the Artificial Avoidance of Permanent Establishment Status, Action 7 - 2015 Final Report You or your institution have access to this content

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05 Oct 2015
9789264241220 (PDF) ;9789264241213(print)

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This report includes changes to the definition of permanent establishment in the OECD Model Tax Convention that will address strategies used to avoid having a taxable presence in a country under tax treaties. These changes will ensure that where the activities that an intermediary exercises in a country are intended to result in the regular conclusion of contracts to be performed by a foreign enterprise, that enterprise will be considered to have a taxable presence in that country unless the intermediary is performing these activities in the course of an independent business. The changes will also restrict the application of a number of exceptions to the definition of permanent establishment to activities that are preparatory or auxiliary nature and will ensure that it is not possible to take advantage of these exceptions by the fragmentation of a cohesive operating business into several small operations; they will also address situations where the exception applicable to construction sites is circumvented through the splitting-up contracts between closely related enterprises.

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Table of Contents


A. Artificial avoidance of PE status through commissionnaire arrangements and similar strategies

B. Artificial avoidance of PE status through the specific activity exemptions

C. Other strategies for the artificial avoidance of PE status

D. Profit attribution to PEs and interaction with action points on transfer pricing

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