Practitioner Expects BEPS Work on Permanent Establishments to Expand

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The scope of the work on permanent establishments set forth in the Organization for Economic Cooperation and Development's action plan to combat base erosion and profit shifting (BEPS) is likely to expand, according to a Washington, D.C, practitioner.
Steve Nauheim of PricewaterhouseCoopers LLP said Oct. 8 that the work of Action 7 of the BEPS plan, which calls for changes to Article 5 of the OECD Model Tax Treaty, is likely to be expanded beyond commissionaires.
Action 7 tasks the OECD with deciding whether to treat commissionaires as dependent agents that bind their principals, a treatment that creates a PE of the principal in the jurisdiction where the commissionaire operates.