Tag: Dependent agent

The term “dependent agent” is a treaty concept which refers to a person who acts on behalf of another person. The concept of dependent agent is important in determining whether a nonresident person has a permanent establishment in a country.

Spain vs Dell, June 2016, Supreme Court, Case No. 1475/2016

Spain vs Dell, June 2016, Supreme Court, Case No. 1475/2016

/ Article 7, Business Restructuring, Commissionaire arrangement, Decision predominantly in favor of tax authority, Dell, Dependent agent, Digital Economy, Disallowed deduction, DTA article 5, Employee stock options, Fixed place of business, Ireland, Limited Risk Distributors (LRD), Non-deductible costs, Permanent establishment, Permanent Establishments, Preparatory and auxiliary activities, Sales and Marketing Hubs, Spain, Supreme Administrative Court, Tax treaty interpretation
Dell Spain is part of a multinational group (Dell) that manufactures and sells computers. Dell Ireland, operates as distribution hub for most of Europe. Dell Ireland has appointed related entities to operate as its commissionaires in several countries; Dell Spain and Dell France are part of this commissionaire network. The group operates through a direct sales model and sales to private customers in Spain are conducted by Dell France, through a call centre and a web page. Dell Spain use to operate as a full-fledged distributor, but after entering into a commissionaire agreement Dell Spain now served large customers on behalf of Dell Ireland. A tax assessment was issued by the tax authorities. According to the assessment the activities in Spain constituted a Permanent Establishment of Dell Ireland to which profits had to allocated for FY 2001-2003. Judgement of the Supreme Court The Supreme Court concludes that the activities of Dell Spain constitutes a Permanent Establishment of Dell Ireland under ... Read more