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OECD/ G-20 BEPS Action 7 Permanent Establishment (PE) and Profit Attribution

OECD/ G-20 BEPS Action 7 Permanent Establishment (PE) and Profit Attribution

OECD/ G-20 BEPS Action 7 Permanent Establishment (PE) and Profit Attribution

 Day - Friday, 27 October 2017
 Time - 4:00PM – 5:00 PM

The Organisation for Economic Co-operation and Development (OECD)/ G-20 Base Erosion and Profit Sharing (BEPS) Action 7 has introduced some significant amendments to the provisions of Article 5 of the OECD Model Convention (MC), dealing with the aspect of Permanent Establishments (PE), by addressing some soft spots in the MC; and making the same more stringent for Multinational Enterprises (MNEs), particularly in matters relating to dependent agent PEs.

While majority of the Indian tax treaties and the regulatory and legal system at large carry safeguards to counter such deficiencies, the existence of dependent agency PEs, particularly in the cases of agency and marketing support models, would clearly be a subject matter of additional scrutiny for the Indian Revenue, as India has incorporated majority of the recommendations of BEPS Action 7 through signing of the multilateral instrument.

There has been significant amount of litigation before Courts and Tribunals in India in matters relating to attribution of profits to PEs, where the Revenue, Tribunals and Courts have generally applied the thumb rule approach, in absence of genuine efforts on the part of taxpayers to defend their cases with the help of robust studies prepared as per arm’s length principles under transfer pricing guidelines. The issue around taxability of offshore supply of equipment under EPC contracts, where the foreign enterprises have project PEs in India, has also faced similar fate in tax disputes and litigation.

Please join us for a detailed webinar on Friday, 27 October 2017, where we discuss the key issue of attribution of profits to PEs, along with case studies, with emphasis on dependent agency PEs and project PEs under EPC contracts, in order to sensitise and apprise our revered patrons of the nuances involved in the matter; and the better approaches to be adopted to mitigate exposure in this regard.

Our speaker for this webinar is:

Rahul Mitra, Partner and Head, Transfer Pricing and BEPS, KPMG in India

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