• Dennis Christensen
4. semester, Erhvervsjura, Kandidat (Kandidatuddannelse)
According to Danish domestic law, the definition of a PE follows the defini-tion of a PE in article 5. This is not in accordance with the legality principle found in Grundlovens § 43 (The Danish Constitution). According to GL § 43, taxation can only be done with legal basis in legislation. A change in the do-mestic definition of PE is needed so the domestic definition of a PE is in ac-cordance with the legality principle. OECD’s Model Tax Convention seems to be an important source for interpretation of the double tax conventions. This is confirmed by several domestic cases. OECD’s Model Tax Convention, and thus the double tax conventions can be interpreted both static as well as dy-namic. A static interpretation should be made if there have been material changes in the articles of the model tax convention. A dynamic interpreta-tion is plausible if the changes are of a specifying nature. As to the material application of the PE rules, a PE is a fixed place of business, through which the business of an enterprise is carried on. The business place needs to be fixed, geographically and have a degree of permanence. The term ‘Business’ is defined in domestic law and is further delineated by article 5, 4. The new Anti-fragmentation rule is implemented to prevent closely related enterpris-es from fragmenting activity, to be covered by the exemption list in article 5, 4.1. However, it seems that the range of the anti-fragmentation rule is very broad. Complementary functions that are part of a cohesive business opera-tion are not covered by the exemption list for closely related enterprises, and it is very unsure how this term is delineated. The implementation of the an-ti-fragmentation is not without problems. The implementation will happen gradually, thus resulting in the anti-fragmentation rule to be applicable in some states, and inapplicable in others. This may lead to abuse of the double taxation treaties. Treaty shopping could be a result of this fragmented im-plementation.
SprogDansk
Udgivelsesdato20 nov. 2018
Antal sider73
ID: 290240968