The PE concept and its implications for multinational companies
Disclaimer: "This is not my thought, is a mere summary of someone else work that I forget to quote. The purpose is to get the knowledge from this article and that must be it only." The concept of a permanent establishment (PE) under Article 5 in the OECD Model is primarily important because the business profits of an enterprise of a Contracting State are only taxable in the other Contracting State if the enterprise carries on business through a permanent establishment situated therein. The concept marks the dividing line for business between merely trading with a country and trading in that country. There are two types of a PE contemplated by Article 5. The first type of a permanent establishment is referred as an “associated permanent establishment” which is part of the same enterprise and under common ownership and control like an office and branch. The second type of a permanent establishment is referred as an “unassociated permanent establishment”. This type...