Permanent establishment

From Wikipedia, the free encyclopedia

This article or section does not adequately cite its references or sources.
Please help improve this article by adding citations to reliable sources. (help, get involved!)
This article has been tagged since December 2006.

This article (or section) may need to be wikified to meet Wikipedia's quality standards.
Please help improve this article, especially its section layout, and relevant internal links. (help)
This article has been tagged since October 2006.

The concept of permanent establishment ("PE") is one of the most important issues in international tax treaty law. Virtually all modern tax treaties use PE as the main instrument to establish taxing jurisdiction over a foreigner's unincorporated business activities. The foreign enterprise's profits are taxable in the country where the activity takes place only if the enterprise is deemed to constitute a PE. The OECD model treaty sets forth the general definition of a PE as follows: "For the purpose of this Convention, the term 'permanent establishment' means a fixed place of business through which the business of an enterprise is wholly or partly carried on".