Talk:Permanent establishment
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Removed Joke reference to Bananna Head.
A Bannana Head according to Urban Dictionary is "Someone that is not too smart AND WASTES other peoples time"[1].
--Evolve2k (talk) 00:07, 25 January 2010 (UTC)
Simple explaination
Is this topic still too complex to read as a encyclopedia entry? I think yes.
Basically on my understaning a PE is a tax concept whereby the following occurs. Maybe this can help inform others to edit details into the main document?
Basic explaination
A foreign company starts doing business in a new country. In the new country they do not register/establish a local business, so really fall outside of most local (taxation) laws. But for all purposes they basically are operating like they are a local business, locals are transacting with them, they are promoting locally and may even have employed in-country staff and even an office.
With regards to local taxation, so the company doesn't get off tax free due to confusion between all parties, the concept of Permanenent Establishment exists.
Basically saying, if they look and act like they are a local business, then the activities of their local business should be taxed like a local business. How do we determine this? Well lets test if they have a 'Permanent Establishment' or not.
It reminds me of the duck test (NB. There is no official ref to the duck test in any taxation law Ive seen).
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