Page 70 - F1 Integrated Workbook STUDENT 2018

Chapter 3

4.3 Corporate residence
The OECD model addresses the issues of double residency.
This model states that business profits of an enterprise will only be taxable in a state
if an enterprise has a permanent establishment in that country. A permanent
establishment could include the following:
 A factory

 A workshop
 An office

 A branch
 A place of management

 A mine, an oil or gas well, or a place of natural resources
 A construction project or building site if it lasts for more than 12 months.

If an entity has a permanent establishment in a country, it can be taxed in that
country, causing a possible problem of double taxation.

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