Permanent Establishments and the Mining Industry – A Roadmap to the Taxation of Resource-Based Activities under Tax Treaties

Abstract

The mining industry typically involves foreign expertise and personnel, and the taxation of the business profits generated is a heavily debated issue. Where there is a tax treaty in place, the right of the country to tax business profits sourced within its borders is further compounded by whether or not the foreign investor has a permanent establishment in that country. The permanent establishment concept is therefore central to the taxation rights of the country where the mining activity is being undertaken.