Attribution of Profits to Permanent Establishments
Currently, there is a lack of consensus amongst OECD Member countries as to how profits should be attributed to a permanent establishment (PE). As a first step in remedying this situation a working hypothesis has been developed as to the preferred approach for attributing profits to the PE. The basi...
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| Autor Corporativo: | |
| Formato: | Libro electrónico |
| Idioma: | Inglés |
| Publicado: |
Paris :
OECD Publishing
2001.
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| Materias: | |
| Ver en Biblioteca Universitat Ramon Llull: | https://discovery.url.edu/permalink/34CSUC_URL/1im36ta/alma991009705393606719 |
Tabla de Contenidos:
- PREFACE
- PART I: GENERAL CONSIDERATIONS
- A. Introduction
- B. Interpretation of paragraph 1 of Article 7: Determining the profits of an enterprise
- (i) The "relevant business activity" approach
- (ii) The "functionally separate entity" approach
- (iii) Conclusion
- C. Interpretation of paragraph 2 of Article 7: Determining the profits attributable to the Permanent Establishment
- C-1 First step: Determining the activities and conditions of the hypothesised distinct and separate enterprise
- (i) Functions (activities).
- (ii) Assets used
- (iii) Risks assumed
- (iv) Conclusion
- C-2. Second step: Determining the profits of the hypothesised distinct and separate enterprise based upon a comparability analysis
- (i) Introduction
- (ii) Recognition of dealings
- (iii) Applying transfer pricing methods to attribute profit
- (iv) Comparability analysis
- D. Interpretation of paragraph 3 of Article 7
- E. Interpretation of paragraph 4 of Article 7
- F. Interpretation of Paragraph 5 of Article 7
- PART II: SPECIAL CONSIDERATIONS FOR APPLYING THE WORKING HYPOTHESIS TO PERMANENT ESTABLISHMENTS (PEs) OF BANKS
- A. Introduction
- B. Factual and functional analysis of a traditional banking business
- B-1 Functions performed
- (i) Functions involved in creating a new financial asset - a loan
- (ii) Functions involved in managing an existing financial asset - a loan
- (iii) Other functions
- B-2 Assets used
- B-3 Risks assumed
- (i) Credit rating
- (ii) Capital adequacy requirements
- (iii) Other regulatory requirements
- (iv) Significance of "free" capital
- C. Banks operating through subsidiaries
- D. Applying the WH to banks operating through a PE
- D-1 First step: determining the activities and conditions of the hypothesised distinct and separate enterprise
- (i) Attributing functions to the PE
- (ii) Attributing a credit rating to the PE
- (iii) Attributing "free" capital to the PE
- (iv) Adjusting the interest expense claimed by a PE
- D-2 Second step: determining the profits of the hypothesised distinct and separate enterprise based on a comparability analysis
- (i) Recognition of dealings
- (ii) Applying transfer pricing methods to attribute profit
- (iii) Traditional banking business
- (iv) Agency or conduit functions
