UK Changes Definition of Permanent Establishment

The changes to the definition or permanent establishment (PE) in Great Britain is discussed. The British Finance Act 2019 includes the legislation required to update domestic law to align with the country's position on changes to the PE definition arising from the OECD's Base Erosion and P...

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Bibliographic Details
Published in:Journal of International Taxation 2019-06, Vol.30 (6), p.31-32
Main Authors: Davydov, Aleks, Palazzo, Nick, Watson, Sonia, Cooper, Michael, Greenfield, Philip, Proctor, Ben, Hill, Paige, Pena, Horacia, Verlinden, Isabel
Format: Article
Language:English
Subjects:
Alliances
Double taxation
International taxation
Legislation
Permanent establishment
Tax services
Tax treaties
Taxpayers
Transfer pricing
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Summary:The changes to the definition or permanent establishment (PE) in Great Britain is discussed. The British Finance Act 2019 includes the legislation required to update domestic law to align with the country's position on changes to the PE definition arising from the OECD's Base Erosion and Profit Shifting (BEPS) project and included within the Multilateral Instrument. This effectively expands the definition of PE in the country which together with forthcoming changes to many double tax treaties is likely to result in additional PE. The BEPS project included a workstream focused on reviewing the PE threshold to address situations where taxpayers were setting up arrangements seen as intended to avoid having a PE. In order to adopt the proposed changes to the PE definition from Action 7, changes to double tax treaties, as well as domestic law changes, would be required.
ISSN:1049-6378