The new permanent establishment

• Autor(a) principal: Marques, Tiago Manuel Gonçalves
• Data de Publicação: 2023
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10451/62434
• topic: Direito fiscal; Estabelecimento estável; Países da OCDE; Convenção modelo; Portugal; Teses de mestrado - 2023; Ciências Sociais

The PE is a century-old concept with a fundamental role in the international taxation system via the fair allocation of taxing rights over cross-border business profits within the source-residence principles equilibrium, as a vital threshold for source taxation. Throughout its existence, this pivotal element has relied on its founding principles, which are set on physical presence. The BEPS advent raised public awareness over the global inertia against MNEs' BEPS tax planning and elusion practices employed across the spectre of the international tax system, including within the PE concept, where they sought the avoidance of PE status in source countries through artificial means. Therefore, a resounding change to the international taxation system was required to address the issues identified, as there was a need for a profound global paradigm shift towards global tax planning events since unilateral measures are ineffective towards global acting players, such as MNES, instead, such unilateral actions could cause additional tax planning opportunities. The BEPS Project sparked tumultuous times in international taxation as it was necessary to amend and improve it, including the PE concept. The global economy and MNEs' tax planning practices had evolved, and the international taxation system failed to accompany both. Regarding the PE concept, its framework remained mostly unchanged for fifty years, which revealed significant difficulties towards newer business endeavours and tax planning opportunities, thus amendments were required. Part of the PE concept's elements were placed under the spotlight for modification to prevent the artificial avoidance of PE status. The BEPS Project set off a series of chain reactions, first with the prime device for the immediate implementation of this undertaking's solutions, the MLI, which was expected to deliver results swiftly and harmoniously, and yet, it may have fallen short on its objective thus far. The following reaction came with the OECDMC update, in an attempt to complement the MLI's implementation efforts of the BEPS Project's PE solutions across the global DTT network. Considering the unrest around the PE concept, it matters to focus on its future in the BEPS' quake and aftershocks’ aftermath, where we find that the PE concept’s traditional configuration is still a crucial element of the international taxation system and it should be preserved and improved. Embracing its founding principles, rather than be mauled and transfigured into a hybrid multipurpose tool with questionable viability and effectiveness. This work aims at humbly researching the PE concept based on its pre-BEPS reality and critically analysing the amendments introduced following the BEPS Project, adding to the discussion around the traditional PE concept in a time where the general focus lies in either the attribution of profits to PEs or digital taxation based on the PE and less on the PE concept itself.