The discussion accompanying the service permanent establishment (PE) reflects the continuing tension between the source and the residence principle which has intensified due to the growing political and economic influence of emerging nations. In particular, Germany and Austria, as service exporting countries, view the developments concerning a service PE introduced by the OECD with growing concern, since they collide with the traditional PE concept. In the following, Maximilian Bannes and Cosima Gerlach examine this view with reference to the principle of equivalence, but also point out the practical pitfalls of the recent proposals. They analyze as to what extent the criticism directed toward a changing PE conception is justified.