On August 11, the Organisation for Economic Co-operation and Development published comments to its newly-released 2017 Model Tax Convention. The Convention contains a proposed new paragraph stating registration for VAT has no bearing on the question of whether an organisation has a "permanent establishment" within a jurisdiction; this clarification is especially timely now that a number of countries that have adopted mandatory VAT registration rules for organisations selling e-services to private consumers. The commentators largely approved of the new paragraph, with many suggesting that the OECD go farther and clarify that optional registration and/or appointing a VAT representative would also have no implications for the permanent establishment question.
About the Author
Charles Riordan is a member of the Tax Research team at Sovos Compliance specializing in international taxation, with a focus on Value Added Tax systems in the European Union. Charles received his J.D. from Boston College Law School in 2013 and is an active member of the Massachusetts Bar.More Content by Charles Riordan