PE Advisory

With the need to be compliant on both local and international tax laws, the tax landscape for companies today is more complex than before. That is the context in which local tax systems use the concept of Permanent Establishment under corporate international tax, a concept of vital importance for companies with operations abroad.Permanent Establishment (PE) refers to a ‘fixed place of business’ generating a tax-liable income. It determines a company’s tax liability, obligations, and compliance in the ‘resident’ and ‘source’ countries both. Understanding PE, correctly attributing income and calculating liability in each jurisdiction, knowing the procedures involved and keeping updated on changes to any of these are all necessary for companies to remain compliant, mitigate risks, and achieve their objectives.

MBG Corporate Services has the depth of understanding, insightfulness, and eye for detail across your entire value chain that is needed to mitigate your PE-compliance risks.

MBG’s PE Advisory services include:

• Advice on PE implications under local income tax laws
• Evaluation of PE exposure of transactions and business structures
• Guidance on the different types of PEs – Fixed Place PE, Service PE, Supervisory PE, Installation PE, Agency PE, and Virtual PE – vis-a- vis local tax laws and DTAAs
• PE-focused review of process flows, operational decisions, transactions, appointments, etc.
• Advice on WHT obligations, if any, with respect to PE
• Counsel and Do/Don’t guidelines on PE exposure mitigation, including through operational structures
• Compliance advisory and support on PE-related tax filings
• Agreement drafting and vetting to minimize PE exposure
• Study of beneficial tax provisions under the DTAAs and their interaction with local tax laws
• BEPS Action Plan 7 (Artificial avoidance of PE Status) related advice on PE implications