Report on the attribution of income to permanent establishments 1994

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The 1994 OECD report on issues related to the attribution of income to permanent establishments, was made available to the public by decision of the OECD Council on 26 November 1993.

The report examines the circumstances under which income is to be attributed to a permanent establishment for purposes of an income tax treaty, particularly where goods, services, or intangibles are transferred between the permanent establishment and the home office or another permanent establishment in a third country.

  • Part I sets out general issues related to attributing income to permanent establishments.
  • Part II describes issues raised by the tax treatment of Permanent Establishments.
  • Part III contains conclusions and suggestions

 






Related Guidelines

  1. Guidance on the attribution of profits to permanent establishments 2008On 17 July 2008, the OECD Council approved the release the Report on the Attribution of Profits to Permanent Establishments. The Report includes a preface and four Parts. Part I sets out general considerations for attributing profits to permanent establishments, regardless of the...
  2. Guidance on the attribution of profits to permanent establishments 2010On 22 July 2010 a new report on the attribution of profits to permanent establishments was published. The 2008 Report will serve as background guidance to the 2008 revised Commentary‘s interpretation of the pre-2010 Article 7 for as long as bilateral tax treaties that...

Related Case Law

  1. Italy vs HSBC Milano, September 2019, Supreme Court, Case No 23355HBP is a company resident in the United Kingdom, which also carries on banking business in Italy through its Milan branch (‘HSBC Milano’), which, for income tax purposes, qualifies as a permanent establishment (‘PE’ or ‘branch’) and grants credit facilities to Italian companies...
  2. Italy vs Citybank, April 2020, Supreme Court, Case No 7801/2020US Citybank was performing activities in Italy by means of a branch/permanent establishment. The Italian PE granted loan agreements to its Italian clients. Later on, the bank decided to sell these agreements to a third party which generated losses attributed to the PE’s...
  3. Netherlands vs NL PE, October 2018, Amsterdam Court of Appeal, case no. 17/00407 to 17/00410Company X B.V. held all the shares in the Irish company A. The Tax Agency in the Netherlands claimed that the Irish company A qualified as a “low-taxed investment participation”. The court agreed, as company A was not subject to a taxation of...
  4. Spain vs. branch of ING Direct Bank, July 2015, Spanish High Court, Case No 89/2015 2015:2995In the INC bank case the tax administration had characterised part of the interest-bearing debt of a local branch of a Dutch bank, ING DIRECT B.V,  as “free” capital, in “accordance” with EU minimum capitalisation requirements and consequently reduced the deductible interest expenses...
  5. Italy vs Gulf Shipping & Trading Corporation Ltd Inc, October 2020, Supreme Court, Case No 21693/2020The Italian Revenue Agency had notified to Gulf Shipping & Trading Corporation Ltd Inc. several notices of assessment, relating to the tax years 1999 to 2006, contesting undeclared taxable income, having ascertained that the aforesaid company had a permanent establishment in Italy through...