Dependent Agents as Permanent Establishments
1. Aufl. 2014
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S. 272I. Introduction
This chapter will discuss the concept of a dependent agent permanent establishment as provided for in article 5(5) through 5(7) of the UN Model Double Taxation Convention (UN Model). It will highlight the differences vis-à-vis the dependent agent PE provisions in the OECD Model Conventions and suggest reasons for, and possible implications of these differences.
II. The Dependent Agent Permanent Establishment
A. The dependent agent PE in article 5(5) of the UN Model
The UN Model between developed and developing countries has based its concept of the permanent establishment on article 5 of the OECD Model Tax Convention (OECD Model). However, at several places in this article, significant deviations have been made from the OECD version. One of these differences can be found in the dependent agent clause of article 5(5) of the UN Model. In essence, the dependent agent clause of the UN Model follows the OECD Model, as it states in its Commentary that:
It is generally accepted that, if a person acts in a State for an enterprise in such a way as to closely tie up the activity of the enterprise with the economic life of that State, the enterprise should be treated as having a pe...