Profit Attribution to Dependent Agent Permanent Establishments in a Post-BEPS Era

Abstract

The overall topic of profit attribution to dependent agent permanent establishments is a highly complex issue. Various aspects are controversially discussed in literature. From a general perspective, article 7 and article 9 of the OECD Model are both fundamentally based on the arm’s length principle, which was initially established in the early 1930s in order to properly account for profit attributions within MNEs. Since its beginnings, the arm’s length principle(s) under article 7 and article 9 of the OECD Model have evolved over time. In this respect, especially the OECD’s work under the Authorised OECD Approach, BEPS Action 7 as well as under BEPS Actions 8-10 have eventually minimized, or even closed the gap between, the principles of profit attribution under article 7 and article 9 of the OECD Model. This article will analyse the topic of profit attribution to dependent agent permanent establishments, thus dealing with the question as to whether or not different results could/should arise when applying article 7 and article 9 of the OECD Model in a post-BEPS era.