Permanent Establishment : Conceptual Singularities and Collision of Taxing Status

Abstract

The article focuses on the essence and taxing status of a permanent establishment as a key institution in dispensing income taxing of enterprises operating beyond the borders of their home state. The article lists major provisions determining the concept of a permanent establishment in accordance with OECD Model Convention. Two types of a permanent establishment are distinguished: first, when a business operates in a hosting state in a permanent fixed place and second, when business is carried out via an agent. Also, situations where an enterprise sets no permanent establishment are discussed. The article also deals with singularities of the taxing status of a permanent establishment under international taxing law and EC legislation and discloses collision between international legal norms on taxation and major freedoms and principles of the European Union.