Dr Pedrosa López, member of the ETICCs group and lecturer at the Universitat de València, has published the monograph La atribución de rentas al establecimiento permanente (The allocation of income to the permanent establishment), in the prestigious Tirant lo Blanch publishing house.
The allocation of income to a permanent establishment is one of the most complex issues in international taxation. This book analyses the legal tax regime for the attribution of income and expenses to a permanent establishment on the basis of Article 7 of the Model Tax Convention.
In light of the different interpretations and understandings of Article 7(1) of the Model Tax Convention, the book analyses the conventionally provided methods for attributing income to the permanent establishment. After distinguishing between the functionally separate entity approach and the relevant economic activity approach, this book discusses in detail the OECD Reports on the Attribution of Profits to Permanent Establishments to assess the configuration of the versions of the direct method, with a particular focus on the OECD Approach.
This work also takes into account that the tax regime applicable to these treaty provisions, which define the parameters of tax competition between States with respect to business income, is ultimately a matter for the domestic tax system of the State of the situation. This work therefore questions the Spanish legislator's efforts to incorporate the treaty rules into the Spanish legal system and discusses the configuration of a tax regime left to the vagaries of soft law documents.
