Strategizing Multinational Tax Risks

The OECD provided this guidance in April, 2020, although the PE issue remains in many countries due to the COVID-19 crisis.  The guidance revisits OECD PE guidelines and commentary, and also represents opportunities to revisit potential PE issues for employees working from home as companies adopt regional and global work from home policies.

The document highlights the fact that temporary COVID-19 interruptions should not change a permanent establishment (PE) determination, although tax administrations should publish more guidance on their domestic PE laws and determinations.

Home offices, agency PE and construction site PE situations are addressed.  Summaries are also provided for place of effective management (POEM)/dual residence, income tax considerations for cross-border workers, and treaty residence issues.

The guidance is a valuable read, especially as countries are now starting to address these issues with more focus.  The diminished fiscal growth may also change the direction of penalty abatement, especially in areas that may subject to interpretation.

https://read.oecd-ilibrary.org/view/?ref=127_127237-vsdagpp2t3&title=OECD-Secretariat-analysis-of-tax-treaties-and-the-impact-of-the-COVID-19-Crisis