OECD issues draft tax guidelines on permanent establishment
The Organisation for Economic Co-operation and Development (OECD) issued draft of guidelines for country’s establishing rules on permanent establishment. The draft is an aspect of the OECD’s project to bring transfer pricing under an international regime. The Base Erosion and Profit Shifting (BEPS) initiative aims to exclude from treaty benefits income derived via third country permanent establishments; proposes to change the corporate residence tie-breaker test in Article 4(3); and proposes clarification that tax treaties are not intended to be used to generate non-taxation. Concerned parties have until April 3 to submit comments.