Research On Recognized Rules Of Labor Service-Type Permanent Establishment In Tax Treaties Between China And Foreign Countries

The term permanent establishment was originally used in the area of tax law for the purpose of avoiding double taxation.Article 5 of the OECD Model and the United Nations Model provides a general definition of a permanent establishment and refers to a fixed place in which an enterprise carries out all or part of its business activities.This definition reveals the three basic characteristics of a permanent establishment: fixed in time and space,the connection between the firm and the fixed place,and the business activity of the enterprise.With the continuous development of the world economy and trade,the types of permanent institutions are no longer limited to the permanent establishment in the past.A number of new types of permanent institutions have been established,including labor permanent institutions.In both international tax treaty models,there is a clear definition of place-based,engineering,and agent-based standing bodies,but the OECD model does not provide for permanent labor services.In order to compensate for the lack of the “OECD model” in the respect,the UN Model established a labor-standing clause in Article 5(3).As a type of permanent establishment,the labor service-type permanent establishment also has the basic characteristics of the traditional permanent establishment.However,they have to make breakthroughs in certain types of permanent establishments,such as fixedness,connectivity and business.And labor service-type permanent establishment also has a unique “labor” factor.Therefore,in the affirmation of labor service-type permanent establishment,labor personnel,service activities and time period are the three basic elements of the identification,especially the determination of time period,directly related to the establishment of labor service-type permanent establishment.In China's tax treaties signed by foreign countries,the provisions on permanent labor service institutions are based on China's national conditions of capital and technology importing countries,and follow the “United National Model” on the basis of the formulation.However,in order to adapt to the national conditions and the development of practice,China in the foreign tax agreement signed on the labor permanent establishment of the provisions are not the same.No uniform rules are used in the determination of labor services,services activities,“same or related items” and time periods.Moreover,due to the confusion of the international rules,the lack of domestic legislation and the obsolete contents of China's tax treaty negotiations,there are differences between the permanent establishment and labor service-type permanent establishment in Chinese and foreign tax treaties,the ambiguity of the standard definition of labor service personnel and the time limit lack of basis for calculation and other defects.On the basis of adhering to the principles of tax fairness,tax neutrality and tax efficiency,our country should perfect the legal framework of labor service-type permanent establishment.In addition,it is necessary to develop a model of domestic tax treaties,and in which set up a special term for labor service-type permanent establishment.