Author Description

The taxation of business profits derived from cross-border activities is one of the core issues in international tax law. The key principle for the allocation of taxing rights between countries is laid down in article 7 of the OECD Model, which states that profits of a resident enterprise of a state shall be taxable only in that state unless the enterprise carries on business in another state through a permanent establishment situated therein. In the latter case, the profits that are attributable to the permanent establishment may be taxed in that other state. The determination of the source state's taxing rights basically requires two steps. First, it must be determined whether or not there is a permanent establishment in that state, as defined by article 5 of the OECD Model, and second, the profits attributable to that permanent establishment must be ascertained. This book sheds light on a selection of issues surrounding the essential questions described above from a practical as well as from an academic perspective.