The June 2017 discussion draft sets out high-level general principles for the attribution of profits to PEs in the circumstances addressed by Action 7 of the BEPS Action Plan.
It gives guidance on the following:
- PEs arising from article 5, paragraph 5 of the OECD model treaty, including examples of a commissionnaire structure for the sale of goods, an online advertising sales structure, and a procurement structure.
- PEs created as a result of the changes to article 5, paragraph 4, including an example on the attribution of profits to PEs arising from the anti-fragmentation rule included in new paragraph 4.1 of article 5.
Interested parties are reminded to send comments on the proposals in the June 2017 discussion draft by September 15, 2017.
(Further comments are not invited on the 2016 discussion draft and on the PE definitions agreed in Action 7 that were published in the 2015 Final Report.)