Permanent Establishment for Investors in Private Equity Funds: A Legal Analysis in Light of the Changes to the OECD Model (2017)

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

Resumé

The article analyzes whether the investment in a private equity fund may create a permanent establishment (PE) for foreign investors. The analysis is divided into two main parts, as the question of creating a PE for the foreign investors is considered with respect to both the main PE rule and the agency PE rule. The amendments to the PE definition prescribed in the OECD/G20 BEPS report on Action 7, and incorporated into the 2017 version of the OECD Model with Commentary, are taken into consideration. It is concluded that the final outcome depends on the specific setup of the private equity fund at hand and that some degree of uncertainty may often remain. Moreover, the recent amendments to the PE definition do not appear to have reduced this uncertainty—rather the contrary.
OriginalsprogEngelsk
TidsskriftNordic Tax Journal
Antal sider25
ISSN2246-1809
DOI
StatusUdgivet - 15 jun. 2019

Bibliografisk note

Epub ahead of print. Published online: 15. June 2019

Emneord

  • Private equity funds
  • International tax law
  • Permanent establishment
  • Dependent agent
  • BEPS
  • International tax policy

Citer dette

@article{7decc156eede40eeb72d7a04812c0ac3,
title = "Permanent Establishment for Investors in Private Equity Funds: A Legal Analysis in Light of the Changes to the OECD Model (2017)",
abstract = "The article analyzes whether the investment in a private equity fund may create a permanent establishment (PE) for foreign investors. The analysis is divided into two main parts, as the question of creating a PE for the foreign investors is considered with respect to both the main PE rule and the agency PE rule. The amendments to the PE definition prescribed in the OECD/G20 BEPS report on Action 7, and incorporated into the 2017 version of the OECD Model with Commentary, are taken into consideration. It is concluded that the final outcome depends on the specific setup of the private equity fund at hand and that some degree of uncertainty may often remain. Moreover, the recent amendments to the PE definition do not appear to have reduced this uncertainty—rather the contrary.",
keywords = "Private equity funds, International tax law, Permanent establishment, Dependent agent, BEPS, International tax policy, Private equity funds, International tax law, Permanent establishment, Dependent agent, BEPS, International tax policy",
author = "Schmidt, {Peter Koerver}",
note = "Epub ahead of print. Published online: 15. June 2019",
year = "2019",
month = "6",
day = "15",
doi = "10.1515/ntaxj-2019-0002",
language = "English",
journal = "Nordic Tax Journal",
issn = "2246-1809",
publisher = "De Gruyter",

}

TY - JOUR

T1 - Permanent Establishment for Investors in Private Equity Funds

T2 - A Legal Analysis in Light of the Changes to the OECD Model (2017)

AU - Schmidt, Peter Koerver

N1 - Epub ahead of print. Published online: 15. June 2019

PY - 2019/6/15

Y1 - 2019/6/15

N2 - The article analyzes whether the investment in a private equity fund may create a permanent establishment (PE) for foreign investors. The analysis is divided into two main parts, as the question of creating a PE for the foreign investors is considered with respect to both the main PE rule and the agency PE rule. The amendments to the PE definition prescribed in the OECD/G20 BEPS report on Action 7, and incorporated into the 2017 version of the OECD Model with Commentary, are taken into consideration. It is concluded that the final outcome depends on the specific setup of the private equity fund at hand and that some degree of uncertainty may often remain. Moreover, the recent amendments to the PE definition do not appear to have reduced this uncertainty—rather the contrary.

AB - The article analyzes whether the investment in a private equity fund may create a permanent establishment (PE) for foreign investors. The analysis is divided into two main parts, as the question of creating a PE for the foreign investors is considered with respect to both the main PE rule and the agency PE rule. The amendments to the PE definition prescribed in the OECD/G20 BEPS report on Action 7, and incorporated into the 2017 version of the OECD Model with Commentary, are taken into consideration. It is concluded that the final outcome depends on the specific setup of the private equity fund at hand and that some degree of uncertainty may often remain. Moreover, the recent amendments to the PE definition do not appear to have reduced this uncertainty—rather the contrary.

KW - Private equity funds

KW - International tax law

KW - Permanent establishment

KW - Dependent agent

KW - BEPS

KW - International tax policy

KW - Private equity funds

KW - International tax law

KW - Permanent establishment

KW - Dependent agent

KW - BEPS

KW - International tax policy

UR - https://sfx-45cbs.hosted.exlibrisgroup.com/45cbs?url_ver=Z39.88-2004&url_ctx_fmt=info:ofi/fmt:kev:mtx:ctx&ctx_enc=info:ofi/enc:UTF-8&ctx_ver=Z39.88-2004&rfr_id=info:sid/sfxit.com:azlist&sfx.ignore_date_threshold=1&rft.object_id=3340000000002186&rft.object_portfolio_id=&svc.holdings=yes&svc.fulltext=yes

U2 - 10.1515/ntaxj-2019-0002

DO - 10.1515/ntaxj-2019-0002

M3 - Journal article

JO - Nordic Tax Journal

JF - Nordic Tax Journal

SN - 2246-1809

ER -