Complex, fast-changing global business models, the growth of the digital economy and the increasing number of companies with internationally mobile staff have combined to force a re-examination of the way tax is assessed on the profits of companies with international operations.
It is important to note that PE should not be perceived as "anti-cross border trade" and that businesses can manage their PE risk legitimately by, generally speaking, adhering to specific rules when operating in different jurisdictions.
The members of Alliott Group's International Tax Services Group [ https://www.alliottgroup.net/international-tax-services-group/] explain in this article the action under way at the global level (in the form of implementation of the BEPS Action Point 7) to provide greater clarity on what will be perceived as the artificial avoidance of PE by foreign companies. Read on to find out why this has implications for any business, large or small, that operates outside its own borders, what the typical triggers are for creating a PE and how risk can be managed. This article also explains the implications of the Multilateral Instrument (MLI) that was signed on 7th June 2017 by 67 countries, strengthening the dependent agent PE rules.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
