Ascertaining International Tax status
Corporate international tax has become more complex in today’s world, with both local laws and international laws and guidance to manage simultaneously. Local tax legislations have the concept of Permanent Establishment under corporate international tax wherever applicable.
Permanent Establishment (PE) refers to a ‘fixed place of business’ which produces an income with tax liability. It is an important concept for businesses with cross-border operations. It can determine your tax liability, compliance and obligations across both ‘resident’ and ‘source’ countries. Clarity on the concept, correct attribution of income and computation of liability in each jurisdiction, in-depth procedural knowledge and staying abreast of new developments are all critical to ensuring that your business stays compliant, mitigates risks, and maximizes your business objectives.
Dealing with PE issues calls for strong in-depth understanding and perceptiveness. MNA Corporate Services has the meticulous eye for detail about every aspect of your value chain that is required to mitigate any unforeseen risks caused by PE legislation and its compliances.
Our range of PE Advisory services include:
• Advice on PE implications under local income tax laws
• Assessment of PE exposure of existing or proposed business structures and transactions
• Advice on the different types of PEs across Fixed Place PE, Service PE, Supervisory PE, Installation PE, Agency PE, and Virtual PE under Local Tax laws and DTAAs
• Review of process flows, operational decisions, transactions, appointments, etc. from a PE perspective.
• Advice on Withholding Tax obligations, if any, with respect to PE
• Advice on mitigating PE exposure, including through operational structures and the dos and don’ts to be followed
• Compliance advisory and assistance in terms of tax filings related to PE
• Drafting and vetting of agreements to minimize PE exposure wherever possible.
• Analysis of beneficial tax provisions under the DTAAs and their interplay with local income tax laws
• Advice on PE implications vis-a-vis BEPS Action Plan 7 (Artificial avoidance of PE Status)
