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Description

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. 

What you will learn

At the end of this programme, you will be able to:

• Explain the importance of the PE concept in tax treaties for attributing taxing rights between countries. OECD vs UN Model Conventions
• Identify the different types of PE
• Determine whether certain business activities of an enterprise constitute a PE
• Gain an update on the development of BEPS Action Plan in relation to PE
• Evaluate the PE risks involved in establishing a business presence overseas
• Find out ways to manage PE risk

Target Audience

• Tax Managers / Professionals
• CFOs / Finance Directors / Managers who wish to have a broad overview of PEs and understand their impact on their overseas operations
• Finance Professionals who need to understand the implications of PE and its implications on their planning process

Programme Outline

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

PE Fundamentals

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

Q&A Session

Expert Speaker

Chester Wee, Partner and ASEAN International Corporate Tax Advisory Leader, Ernst & Young Singapore

Chester has 20 years of experience in advising on cross-border tax issues, managing tax controversy as well as handling tax compliance and reporting – in both inbound and outbound investments.

Chester is experienced in tax structuring, permanent establishment risk management and tax controversy and dispute resolution.

He has deep knowledge in reviewing holding structures and operating models; managing tax residence issues; identifying and managing withholding tax issues and permanent establishment risks; and advising on intellectual property (IP) strategies and migration, and tax efficient repatriation of profits and cross-border financing.

Chester completed the Advanced Tax Programme at the Tax Academy of Singapore. He earned his bachelor’s degree in Accountancy from Nanyang Technological University.