Travellers, Tax Policy and Agency Permanent Establishments

Abstract:     
This article analyses the policy, historical development and current application of permanent establishment rules for travellers. It is readily accepted that pedlars and itinerant merchants do not give rise to permanent establishments but after many years of the agency permanent establishment rules apparently requiring that the agent have a fixed place of business in the country concerned, the OECD has recently concluded to the contrary for travelling salesmen. The article argues that the OECD should have followed the historical trend as that matches the OECD’s proclaimed policies for adopting the permanent establishment as the international threshold for taxing business income more closely.

Keywords: OECD, agents, foreign travel, permanent establishment, tax principles, travellers

JEL Classification: K10, K30, K33, K34

Accepted Paper Series