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Permanent Establishment Issues

Published on 26 Oct 2005 | Took place at Old Swan Brewery, Perth, WA

With the recent spate of international tax reforms, the concept of PE has taken an increased role in international tax planning.

It is critical for taxpayers to understand whether a PE has been created and, if so what it means for inbound and outbound investors.

Individual sessions

Permanent establishment issues

Author(s):  Mathew CHAMBERLAIN

This paper focusses on the central role played by PE in Australian international tax law, including:

  • the impact for Australian businesses operating offshore through a PE, including the ability of foreign countries to tax the PE operations, the ability to claim foreign tax credits in Australia for foreign taxes as well as recent changes to the Australian tax treatment of foreign branch income and the quarantining of foreign source deductions
  • what is required for an overseas entity to have a taxable Australian PE under Australian domestic law and as a result of various tax treaties entered into with other countries
  • if a PE exists, what does it mean for the overseas entity (ie registering for income tax, lodging income tax returns etc), non-resident contractors etc.
  • the interaction between Australian domestic tax law and tax treaties, including a detailed discussion of recent case law and the varying implications depending upon the country of residence of the overseas entity.
Materials from this session: