Permanent Establishment (PE) Advisory

In the modern world, corporate international tax has gotten increasingly complicated due to the need to concurrently handle local laws and worldwide rules and regulations. Where relevant, local tax laws under corporate international tax have the idea of a permanent establishment.

Permanent Establishment (PE) refers to a ‘fixed place of business’ which produces an income with tax liability. For companies that conduct cross-border business, it is a crucial principle. Your tax due, compliance, and obligations can be calculated for both “resident” and “source” nations. Clarity regarding the concept, accurate income attributing and liability computation in each jurisdiction, in-depth procedural knowledge, and staying up to date on new developments are all essential for making sure your company maintains compliance, minimizes risks, and achieves your business goals to the fullest.

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)