scholarly journals A New Nexus Based on the Concept of Significant Economic Presence: The Digital Permanent Establishment

2019 ◽  
pp. 377-390
Author(s):  
Soraya Rodríguez Losada
Keyword(s):  
Foreign Market ◽  
Corporate Taxation ◽  
Final Report ◽  
Traditional Concept ◽  
Permanent Establishment ◽  
Physical Presence

The traditional concept of EP status is obsolete and enables digital companies to enter a foreign market jurisdiction without having a minimal physical presence. These companies usually do not reach the threshold required to establish the necessary taxable nexus to attribute the profits to that jurisdiction. For the purpose of realigning corporate taxation with the location of actual business activities, Action 1 Final Report relaunches the debate of a new nexus based on the concept of significant economic presence.

scholarly journals PERMANENT ESTABLISHMENT. THE CRISIS OF THE ARTICLE 5 OECD MC IN THE DIGITAL ECONOMY

2021 ◽  
Vol 180 (3) ◽  
pp. 97-131
Author(s):  
Montserrat Hermosín Álvarez
Keyword(s):  
Business Models ◽  
Digital Economy ◽  
Legal Regime ◽  
Traditional Concept ◽  
Permanent Establishment ◽  
Physical Presence ◽  
The Moment ◽  
Article 5 ◽  
Economic Capacity

The rise of the digital economy, breaking with business models that require a physical presence to develop their activities, has dislodged the traditional concept of permanent establishment set out in Article 5 OECD MC. In the light of the precept’s loopholes, large multinationals have engaged in abusive practices to relocate their profits, thus avoiding contributing in the States where the income is generated in accordance with their economic capacity. In this paper, we examine the concept of permanent establishment included in art. 5 OECD MC, its typology following the BEPS Project’s modifications and the different scenarios that do not constitute a permanent establishment. We also explore whether its legal regime continues to be useful in today’s context or whether, on the contrary, the moment has come to abandon the concept of permanent establishment entirely due to the problems generated by today’s article 5 OECD MC, unable to respond to the challenges posed by the digital economy.

The Concepts of Legal Status of the Permanent Establishment in the Era of Digital Economy

2019 ◽  
pp. 2079-2090
Author(s):  
Karina A. Ponomareva
Keyword(s):  
Comparative Analysis ◽  
Legal Status ◽  
Digital Economy ◽  
Tax Law ◽  
Traditional Concept ◽  
Tax Legislation ◽  
Permanent Establishment ◽  
Physical Presence ◽  
The Subject ◽  
Traditional Approaches

The purpose of the article is to identify the key features of the proposals to modify the concept of permanent establishment in digital economy, as well as their differences from the traditional concept of permanent establishment. The subject of the study is a comparative analysis of the concepts of digital presence, aimed at finding new factors for the distribution of tax revenues between the states in which digital enterprises operate. The development of the digital economy necessitates the revision of traditional approaches to the taxation of permanent establishment in the doctrine of tax law and in tax legislation. The article considers doctrinal approaches to the concept of permanent establishment in the digital economy, as well as the proposals of the OECD and the European Commission. The core of the debate is the question of whether the classical concept of permanent establishment remains a basis for source taxation for multinational digital enterprises. A comparative analysis of international and European practice shows that the concept of permanent establishment is based on the minimum level of presence of a non-resident in the country required for taxation. This is due to the fact that the main feature of the functioning of digital enterprises, important for tax law, is the absence of the need for their physical presence in the state

scholarly journals On development of the concept of permanent establishment in the age of digitalization within the context of taxation of cross-border activity

2020 ◽  
pp. 6-8
Author(s):  
Svitlana KOVALSKA
Keyword(s):  
International Business ◽  
International Taxation ◽  
Final Report ◽  
Fair Allocation ◽  
International Level ◽  
Economic Activities ◽  
Corporate Tax ◽  
Research Papers ◽  
Cross Border ◽  
Permanent Establishment

Introduction. The article considers modern developments of the concept of permanent establishment in the context of taxation of cross-border activities. The concept which was developed in 1920s has remained virtually unchanged since the early 1960s, despite the huge changes in the way that international business is conducted since then. However, as nowadays acknowledged, digitalization of business creates tax challenges, in particular, in a way taxing rights are distributed between the states. These challenges also raise questions regarding the ability of the existing international tax framework to determine where economic activities are carried out and value is created for corporate tax purposes. The purpose of the paper is to consider the developments around the concept of permanent establishment to address tax challenges of the digital economy, in particular, a new nexus for permanent establishment related to digital activities. Results. The purpose of the international taxation system’s design is to ensure fair allocation of taxing rights between different jurisdictions. While the general consensus is that taxation should take place where the value is created the current tax framework lack mechanisms which would ensure such taxation. This issue has been raised in research papers and addressed by the Organization for Economic Cooperation and Development. Although the BEPS Final Report identified tax challenges created, inter alia, by outdated concept of permanent establishment no common consensus was reached regarding measures to be taken to address those challenges. However, as a result of further work the concept of a new nexus was proposed and is being currently discussed. Conclusion. Introduction of the new nexus on an international level will provide the basis for fair allocation of taxing rights between states and will help to prevent unilateral measures taken by different countries to ensure taxation of digital activities within their jurisdictions that may create further distortions.

Nursing and Environmental Health Roundtable: August 26-27, 2002, Research Triangle Park, North Carolina: Final Report

2002 ◽  
Author(s):  
Teresa Nastoff ◽  
◽  
Diane M. Drew ◽  
Pamela S. Wigington ◽  
Julie Wakefield ◽  
...  
Keyword(s):  
North Carolina ◽  
Environmental Health ◽  
Final Report ◽  
Research Triangle
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