Tax Treaty Case Law around the Globe 2016
1. Aufl. 2017
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S. 105Chapter 8 Italy: Is there a Permanent Establishment?
Guglielmo Maisto
8.1. Introduction
The decision 5649, which was delivered by the Supreme Court on 20 March 2015, deals with the existence of a permanent establishment (PE) (stabile organizzazione occulta) in Italy of a non-resident company.
8.2. Legal background and facts of the case
8.2.1. Legal background
Until 2004, Italian domestic tax law did not contain a definition of permanent establishment. The definition of permanent establishment was introduced into domestic law by Legislative Decree 344 of 12 December 2003, with effect from fiscal year 2004. Prior to fiscal year 2004, the Italian tax authorities and tax courts generally referred to article 5 of the OECD Model Convention (or to the applicable double tax convention). As far as the case at hand is concerned, reference should be made to article 5 of the double tax convention concluded between Italy and Luxembourg (hereinafter Ita-Lux Double Tax Convention).
The definition of permanent establishment stipulated by article 162 of Presidential Decree 917 of 22 December 1986 (Consolidated Income Tax Act,S. 106 CITA) fairly follows article 5 of the OECD Model Convention, except for the spec...