The Permanent Establishment The Crisis of an Institution in The Digital Economy

García Prats, F. A., «La figura del establecimiento permanente en el orden tributario mundial», en El tributo y su aplicación: perspectivas para el siglo XXI, Tomo I, Buenos Aires, 2008, p. 1253; Melis, G., «Le interrelazionitra le nozioni di residenzafiscale e stabileorganizzazione: problemi ancora aperti e possibilisoluzioni», DirittoPratica Tributaria, nº. 1, p. 10.029; Fransoni, G., «La stabileorganizzazione: nihil sub solenovi?», Rivista diDirittoTributario, nº. 2, 2015, p. 123.

https://​www.​elmundo.​es/​economia/​empresas/​2019/​09/​15/​5d7be3c6fdddff34​208b45ad.​html.

Miller, J.E., «The Nominee Conundrum: The Live Dummy Is Dead, but the Dead Dummy Should Live!», Tax Law Review, vol. 34, 1978; Hellerstein, W., «State Taxation of Corporate Income From Intangibles: Allied-Signal and Beyond», Tax Law Review, vol. 48, 1993; Rottschaefer, H., «The power of the States to tax Intangibles», North Carolina Law Review, vol. 9, 4, 1931.

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Ault, H.; Schön, W; Shay, S., «Base Erosion and Profit Shifting; A Roadmap for Reform», Bulletin for International Fiscal Documentation, vol. 68, 6–7, 2014; Boidman, N.; Kandev, M. N., «BEPS: The OECD Discovers America?», Tax Notes International, vol. 72, 11, 2013; Brauner, Y., «What the BEPS», Florida Tax Review, vol. 2, 16, 2014.

OECD, Report on Thin Capitalism, OECD, Paris, 1986; OECD, «Double Taxation Conventions and the Use of Base Companies», enInternational tax avoidance and evasion: four related studies, OECD, Paris, 1987; OECD, «Double taxation conventions and the Use of Base Companies», enInternational tax avoidance and evasion: four related studies, OECD, Paris, 1987; OECD, Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, OECD, Paris, 1995; OECD, Harmful Tax Competition, OECD, Paris, 1998; OECD, The application of the OECD Model Tax Convention to Partnerships, OECD Publishing, 1999; OECD, Clarification on the Application of the Permanent Establishment Definition in E-Commerce: Changes to the Commentary on the Model Tax Convention on Article 5, OECD, Paris, 2000; OECD, Treaty Characterisation Issues arising from E-Commerce, OECD, Paris, 2002; OECD, 2002 Reports Related to the OECD Model Tax Convention, OECD Publishing, 2003; OECD, E-Commerce: Transfer Pricing and Business Profits Taxation, OECD, Paris, 2005; OECD, The Tax Treaty Treatment of Services, OECD, Paris, 2006; OECD, Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, OECD Publishing, 2010; OECD, The Granting of Treaty Benefits with respect to the Income of Collective, OECD, Paris, 2010; OECD, Clarification of the Meaning of «Beneficial Owner» in the OECD Model Tax Convention, OECD, Paris, 2014.

Vid. OECD, Electronic commerce: taxation framework conditions, Ottawa, 1998 (https://​www.​oecd.​org/​ctp/​consumption/​1923256.​pdf).

Vid. Sprague, G. D. y Boyle, M. P., «General Report», IFA, Cahiers de Droit Fiscal International. Taxation of income derived from electronic commerce, vol. 86a, Kluwer Law International, The Hague, 2001, p. 23.

OECD, The Digital Economy, Paris, 2012, p. 5 (http://​www.​oecd.​org/​daf/​competition/​The-Digital-Economy-2012.​pdf).

Carbajo Vasco, D., «the OECD has constantly adapted the wording of article 5 to shifts of economic conditions. However, such adjustments have not keep pace with the rapid evolution of MNE strategies, the expansion of new technologies, the appearance and development of the e-commerce and the birth of the digital economy» («BEPS and the concept of permanent establishment, is the end of the story», Documentos de Trabajo, Instituto de EstudiosFiscales, núm. 3, 2018, p. 295).

Ritter, W., «GrenzüberschereitendeGewinnabgrenzungbeiBetriebstätten-Ein systematischerVersuch», Jahrbuch der FachanwältefürSteuerrecht, 1976/1977, p. 288.

Burlada Echeveste, J.L., “La noción de establecimiento permanente a la luz del proyecto BEPS”, Revista Quincena Fiscal, núm. 20, 2018, BIB 2018\13660, p. 6; Mas Hernández, J., “Acotando el abuso del EP: medidas adoptadas en el marco de BEPS”, Crónica Tributaria, núm. 158, 2016, pp. 191 y ss; Ramos Prieto, J., “Acción 1. La crisis de la noción de establecimiento permanente: un paradigma de los desafíos que afronta la tributación de los beneficios de las empresas multinacionales en el contexto de la economía digital”, en (Ramos Prieto, J., Dir.) Erosión de la base imponible y traslado de beneficios: estudios sobre el plan BEPS de la OCDE, Thomson Reuters Aranzadi, Cizur Menor (Navarra), 2016, pp. 42–44.

«The so-called “place of business” test needs a physical presence of the non-resident taxpayer in the source country territory. Even though the term “place” has been broadly interpreted, it is clear from the start that the digital economy doesn´t need any physical structure to do business abroad» (Carbajo Vasco, D., «BEPS and the concept of permanent establishment, is the end of the story», Documentos de Trabajo, Instituto de EstudiosFiscales, núm. 3, 2018, p. 294).

See Commentary on paragraph 4, article 5 Model Tax Convention on Income and on Capital OECD.

Vid. OECD, Clarification on the application of the permanent establishment definition in e-commerce: changes to the commentary on the Model Tax Convention on Article 5, París, 2000 (http://​www.​oecd.​org/​tax/​treaties/​1923380.​pdf) y OECD, Are the current treaty rules for taxing business profits appropiate for e-commerce?, París, 2005 (http://​www.​oecd.​org/​ctp/​treaties/​35869032.​pdf).

Avery Jones, J. F. y Lüdicke, J.«The origins of article 5(5) and 5 (6) of the OECD Model», World Tax Journal, October 2014.

«BEPS is a reaction, as we know, against these strategies, but a very insufficient and lately one» (Carbajo Vasco, D., «BEPS and the concept of permanent establishment, is the end of the story», Documentos de Trabajo, Instituto de EstudiosFiscales, nº. 3, 2018, p. 298).

«BEPS concerns around the PE rules (outside the digital economy issues) relate primarily to situations where one member of a group (e.g. a commissionnaire) clearly has a physical presence and tax nexus with the jurisdiction but is allocated limited profits because of low risk, whilst another member of the MNE group is shielded from tax by the technical operation of the PE rules and is allocated a large share of the relevant group income (e.g. by virtue of assuming or being allocated business risk, of holding valuable assets, etc.)» (OECD, 2014, p. 43).

Carbajo Vasco, D.: «we strongly demand a whole reconsideration of the PE concept to adapt the taxation of international business profits to the new enterprise organizations of the XXI Century» («BEPS and the concept of permanent establishment, is the end of the story», Documentos de Trabajo, Instituto de EstudiosFiscales, núm. 3, 2018, p. 301).

OECD, Action Plan on Base Erosion and Profit Shifting, op. cit., p. 14: «Action 1 Address the tax challenges of the digital economy. Identify the main difficulties that the digital economy poses for the application of existing international tax rules and develop detailed options to address these difficulties, taking a holistic approach and considering both direct and indirect taxation. Issues to be examined include, but are no limited to, the ability of a company to have a significant digital presence in the economy of another country without being liable to taxation due to the lack of nexus under current international rules, the attribution of value created from the generation of marketable location-relevant data through the use of digital products and services…».

Bal, A. y Gutiérrez, C.,«before implementing any new nexus standards, it would be worthwhile to consider whether the granting of more extensive taxation rights to the source country will positively affect tax revenue collection in that country. To answer this question, it must be clear how to calculate the amount of profits attributable to a “digital presence”, a question that still remains unanswered» («Taxation of the Digital Economy», International Tax structures in the BEPS Era: an analysis of anti-abuse measures, IBFD Tax Research Series, M. Cotrut (editor), Amsterdam, 2015, p. 264).

Oliver Cuello, F., «La fiscalidad directa del comercio electrónico», Quincena Fiscal, 2012, nº. 21, p. 11.

Gómez Requena, J. A. y Moreno González, S, «La adaptación del concepto de establecimiento permanente al contexto comercial digital: de la fijeza a la presencia virtual y económica significativa», Documentos de Trabajo, Instituto de Estudios Fiscales, nº. 3, 2018, p. 355.

Avi-Yonah, D., «Who Invented the Single Tax Principle», University of Michigan Law School Scholarship Repository, 2015. Shaviro, D., «The Two Faces of the Single Tax Principle», New York University Law and Economic Working Papers, nº. 12, 2015.

Vid. Avi-Yonah, D., «International Taxation of Electronic Commerce», Tax Law Review, nº. 52, 1997, p. 520.

Ribes Ribes, A., «La residencia de las personas jurídicas en el Derecho Comparado (con especial referencia al ámbito de la Unión Europea)», Chico de la Cámara, P. (dir.): Residencia fiscal y otros aspectos conflictivos. La armonización de la imposición directa, Aranzadi-Asociación Española de Asesores Fiscales, Cizur Menor (Navarra), 2013, p. 195.

Cubero Truyo, A., «Applicability of criteria characteristic of indirect taxation to future regulation of permanent establishments and technical improvements in their current regulation», Working Papers, Status for Fiscal StudiesNº. 3, 2018, p. 252.

Gómez Requena, J. A. y Moreno González, S., «La adaptación del concepto de establecimiento permanente al contexto comercial digital: de la fijeza a la presencia virtual y económica significativa», Documentos de Trabajo, Instituto de Estudios Fiscales, nº. 3, 2018, p. 357.