Open AccessAttribution of Profits Derived Before or After the Existence of a Permanent Establishment under Tax Treaty Law
Author(s) -
Tobias Hagemann
Publication year - 2019
Publication title -
journal of management and financial sciences
Language(s) - English
Resource type - Journals
eISSN - 2657-5612
pISSN - 1899-8968
DOI - 10.33119/jmfs.2017.29.10
Subject(s) - attribution , tax treaty , context (archaeology) , treaty , convention , economics , tax law , law and economics , double taxation , law , public economics , business , political science , psychology , social psychology , paleontology , biology
The attribution of profits to Permanent Establishments (PE) is one of the most discussed topics in international tax literature, the reason being that the attribution determines the amount of taxation in a PE state. Particular problems arise if such profits are derived before or after the existence of a PE. The article discusses the attribution of such profits under tax treaty law provided for by the OECD Model Tax Convention. In doing so, it is found that profits derived before or after the existence of a PE should be attributed to the PE because not only the wording but also the context and purpose of the OECD Model support this view. In further analysis, however, it is shown that slight changes in the attribution may be expected under the new “Authorized OECD Approach”.