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Research On The Standard Of "Fixed Place Of Business" In The Principle Of Permanent Establishment

Posted on:2021-02-10Degree:MasterType:Thesis
Country:ChinaCandidate:Y DiaoFull Text:PDF
GTID:2416330647450455Subject:International law
Abstract/Summary:PDF Full Text Request
International tax law mainly solves the problem of double taxation of income from cross-border transactions under the conflict between residents' tax jurisdiction and source jurisdiction.The principle of permanent establishment is an important part of bilateral tax treaties,and its role is to distribute the taxation rights of business parties to business income.Only when an enterprise constitutes a permanent establishment in a country can the country tax its business income,otherwise the taxation right is exclusively in the country of residence of the enterprise,This means that the presence or absence of a permanent establishment represents the sharing and monopoly of the right to tax business income.In determining the existence of a permanent establishment,tax authorities of various countries strictly follow the provisions of tax treaties and make hierarchical and systematic judgments according to the three sub-standards under the “fixed”,“ place”,“business” standard.In recent years,with the rise of the digital economy and emerging business models,the standards of permanent establishments and “fixed places of business” summarized in the old business models have been widely questioned.Countries believe that it is difficult to meet the requirements of the new business model,and it is easy to cause artificial avoidance Permanent establishments thus erode the tax base of the country of origin.Based on this,international organizations and countries have proposed many plans,hoping to completely transform or replace the original principle of permanent establishment.It should be noted that the bilateral nature of tax treaties and the economic differences among countries have doomed the difficulties of this subversive transformation.Based on the more developed “fixed place of business” standards as the basis for reshaping and combining the characteristics of the current business model,a proper explanationand reshaping of the “fixed”,“business”,and “place” standards can solve the current tax base erosion Feasible solutions to safeguard the tax interests of countries.The first part of this article takes the development source of permanent establishments as the theme,explores the development process and connotation changes from domestic law to international tax legal system,and elaborates the principle of permanent establishments as the entrance and balance mechanism of taxation rights;The second part focuses on the standard of fixed place of business.Under the rules of tax treaty interpretation,it discusses the meaning of the “fixed”,“business”,and “place” standards from the tax treaty,the model agreement,and relevant notes,and the precautions in practical judgment;The third part observes the impact of the digital economy on permanent establishments from the macro and micro levels,and the obstacles to the “fixed place of business” standard judged by the new business model and demonstrate the erosion of the tax base by digital business models through examples,and briefly introduce the latest revision attempts of countries and international organizations to the standard;The last part analyzes the advantages of the interpretive remodeling program while maintaining the rules and systematization and easy to be accepted by various countries,it is proposed that the“fixed”,“business” and “place” standards should be adapted to the requirements of the digital economy within a reasonable range based on the existing tax treaty rules,through a certain interpretation method.That is,the “fixed” connotation of time and space is appropriately adjusted,the scope of “business” judgment is expanded,and the main business judgment method is introduced to explain the elimination of the tangible existence,and virtual sites such as web sites are included in the “place” standard.Through the above methods,the expected effect of preventing erosion of the tax base can be achieved on the basis of avoiding double taxation.
Keywords/Search Tags:digital economy, double taxation, permanent establishment, fixed place of business
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