Guidance on the attribution of profits to permanent establishments 2010

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On 22 July 2010 a new report on the attribution of profits to permanent establishments was published.

The 2008 Report will serve as background guidance to the 2008 revised Commentary‘s interpretation of the pre-2010 Article 7 for as long as bilateral tax treaties that are based on the text of that version of Article 7 are in force.

However, because the 2008 Report included a number of references to the text of the pre-2010 Article 7, and because the Committee revised the text of Article 7 in the 2010 update to the Model Tax Convention, the Committee believed it would be advisable to prepare a modified version of the 2008 Report which would delete obsolete references to the text of the pre-2010 Article 7 and which would align the Report‘s wording with the wording of the new Article 7, thus making the modified Report available as a future reference for guidance on the interpretation of future treaties based on the new Article 7. The Committee decided to prepare this modified version of the 2008 Report for publication simultaneously with the 2010 update to the Model Tax Convention.

The 2010 Report does not change the conclusions of the 2008 Report and has been prepared simply to avoid difficulties that might arise in trying to use the 2008 Report for the interpretation of the new Article 7.


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