The unintended creation of Permanent Establishment (PE) is a continuous and growing concern for corporations with overseas operations. One of the biggest challenge now includes, globally mobile employees potentially creating PE risks. Many discover that they have inevitably created a PE which puts them in a country’s tax net. Hence, understanding the essence of the PE concept, is key in the management of PE exposure of your organisation.
Additionally, there will be coverage on the impact of an important BEPS’s action plan: to develop changes to the definition of PE to prevent the artificial avoidance of PE status, including through the use of commissionaire arrangements and the specific activity exemptions.
This practical workshop will enable you to grasp the framework and essentials of PE as well as their impacts on tax planning, through a combination of numerous case studies and interactive discussions.
Overview of PE
- Main use of PE concept
- Types of PE
- Relevance of PE definition in Section 2 of the Singapore Income Tax Act
- Differences between definition of PE provided in Article of the OECD and UN Model Conventions
Recent Tax Cases and Case Studies
- Foreign PE tax cases –
- Online business warehouses
- Construction activities
- Sales & marketing activities
- Recurring nature of activities
Overview of Countries’ MLI Preference on PE Provisions in the Tax Treaties
- How BEPS Action Plan 7 makes it easier to create a PE?
How do Companies Manage PE Risk?
- Limited Risk Distributors (LRD) model
- PE blocker
- Global Employment Office (GEO)
- Monitor business travellers
Looking Forward – BEPS 2.0 and the Relevance of Physical Nexus
Mr Chester WeePartner, International Tax Services
Ernst & Young Solutions LLP
Chester has 20 years of experience in advising on cross-border tax issues, managing tax controversy as well as handling tax compliance and reporting. His experiences cover a wide spectrum of industries including Consumer Products & Retail, Real Estate, Hospitality & Construction and Oil & Gas (including shipping). Over the years, he has been assisting businesses in reviewing holding structures and operating models, managing tax residence issues, identifying and managing withholding tax issues and permanent establishment risks, and advising on IP strategies and migration, and tax efficient repatriation of profits and cross-border financing. Chester has also advised US, European and Asian multinational companies regarding the establishment of regional as well as global supply chain management structures in Singapore. Chester regularly participates in EY’s Global Think Tanks. He speaks regularly at conferences and seminars, both in Singapore and overseas. Chester is a facilitator for the Advanced Tax Programme (International Tax Module) conducted by the Tax Academy of Singapore.