Attribution of Profits to Permanent Establishments in the OECD-View

Table of Content

1 Introduction

2 Definition of the Permanent Establishment
2.1 Definition according to Section 12 of the German Fiscal Code
2.2 Definition According to Article 5 OECD Model Tax Convention
2.3 Permanent Establishment in the Double taxation agreement beween Germany and Great Britain

3 The Authorised OECD Approach
3.1 The two step analysis for the Permanent Establishment a Hypothetical Independent Enterprise
3.1.1 Analysis of the functions
3.1.2 Attribution of Assets, Risks and Capital under the OECD Approach
3.1.2.1 Attribution of Assets
3.1.2.2 Attribution of Risks
3.1.2.3 Attribution of Capital
3.1.3 Determination of the profit of the hypothetical independent Permanent Establishment (Selbstständigkeitsfiktion) as the second step
3.1.4 Summary of the two Step Analysis
3.2 The Tax Balance Sheet for the Permanent Establishment
3.2.1 Tangible Assets
3.2.2 Intangible Assets
3.3 Transfer Prices between the Mother Company and the Permanent Establishment
3.3.1 Transfer Price Methods
3.3.1.1 Comparable Uncontrolled Price Method
3.3.1.2 Resale Price Method
3.3.1.3 Cost-Plus Method
3.3.1.4 Transactional Net Margin Method
3.3.1.5 Transactional Profit Split Method
3.3.2 Comparability analysis
3.4 Special Regulations for PE’s of Banks
3.5 Special Regulations for the Trading of Financial Instruments
3.6 Special Regulations for PE’s of Insurance Companies

4 Attribution of profits to permanent establishments In The OECD model tax convention
4.1 Article 7 of the OECD Model tax convention
4.2 Profit allocation according to Article 7 of the OECD model tax convention

5 The Authorised OECD Approach in the GErman Law
5.1 Status Qou of the Profit and Asset Determination
5.2 Change of the Foreign Relation Tax Act

6 Summary

7 list of literature

8 list of abbreviations