Tax Treaty Case Law around the Globe 2018
1. Aufl. 2019
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S. 95Chapter 9 Italy: The Shipbuilder’s Subcontractor Case
Guglielmo Maisto and Paolo Arginelli
9.1. Introduction
The decision of the Supreme Court (Corte Suprema di Cassazione) no. 28059/2017, rendered on (and lodged at the registry of the Court on ), provides a good case for discussing certain issues relating to the existence of a permanent establishment (PE) and, more specifically:
what the relation is between article 5(1) and article 5(2) of the OECD Model;
whether a building/construction/installation PE must satisfy the conditions set forth by article 5(1) of the OECD Model; and
whether the PE definition provided for in article 5(1) of the OECD Model includes an organizational requirement.
9.2. Facts of the case
The case concerns the interpretation and application of article 5(2)(g) of the Italy-Yugoslavia Income and Capital Tax Treaty (1982) (hereinafter the tax treaty), which Italy regarded as applicable in its relation with Slovenia, as one of the successors of the former Yugoslavia. The tax treaty is no longer in force in the relations between Italy and Slovenia.
The relevant paragraphs of article 5 of the tax treaty provided as follows:
1. For the purpo...