The OECD Committee on Fiscal Affairs, through the Focus Group mandated to carry on the work on Action 7 (Artificial Avoidance of PE Status) of the Action Plan on Base Erosion and Profit Shifting (BEPS), invites interested parties to send, before 15 November 2013, a short description of strategies that might be considered to result in the artificial avoidance of the PE status in relation to base erosion and profit shifting.
In July 2013, the OECD published its Action Plan on Base Erosion and Profit Shifting. The Action Plan identifies 15 actions to address BEPS in a comprehensive manner and sets deadlines to implement these actions. Action 7 of the Action Plan deals with strategies that result in the artificial avoidance of permanent establishment status and that raise base erosion and profit shifting concerns.
In accordance with the Action Plan's suggestion that work on the various action items could be carried on through focus groups composed of a relatively small number of delegates, a Focus Group on Preventing the Artificial Avoidance of the PE Status has been set up to carry on the work required by Action 7. The Focus Group is composed of tax officials from various OECD and non-OECD countries.
As part of that consultation process, the Focus Group mandated to carry on the work on Action 7 invites interested parties to send, before 15 November 2013, a short description of strategies (other than commissionnaire arrangements, which have already been identified in the Action Plan) that might be considered to result in the artificial avoidance of the PE status in relation to base erosion and profit shifting. The strategies identified in response to this invitation will be examined by the Focus Group when considering proposals for changes to the definition of permanent establishment.
The Focus Group wishes to stress the narrow scope of this invitation. At this early stage of its work, the Group merely wants to identify situations that may arguably result in the artificial avoidance of the PE status in relation to base erosion and profit shifting. It does not therefore, invite comments on whether work should be done in this area, on whether or not the strategies already identified in the Action Plan effectively result in the artificial avoidance of the PE threshold, on ways to address perceived difficulties with the definition of permanent establishment, on possible changes that should be made to that definition or on other aspects of the BEPS Action Plan. It is expected that responses to this invitation will be in the form of one or a few paragraphs describing each strategy that the Group would be invited to examine.
Comments on this discussion draft should be sent electronically (in Word format) by e-mail to [email protected] and should be addressed to:
Tax Treaties, Transfer Pricing and Financial Transactions Division
OECD/CTPA
Bron: OECD
1