CA Final · Direct Tax Laws & International Taxation · Fundamentals of BEPS
Which BEPS Action Plan deals with 'Preventing the Artificial Avoidance of Permanent Establishment (PE) Status'?
Action 7 of the OECD/G20 BEPS project addresses the artificial avoidance of permanent establishment status. It targets arrangements such as commissionaire structures and abuse of specific activity exemptions, which let enterprises avoid taxable presence in a source country.
- AAction 2
- BAction 7Correct
- CAction 13
- DAction 15
Explanation
Action 7 addresses artificial avoidance of PE status, for example through commissionaire arrangements and specific activity exemptions. Action 2 deals with hybrid mismatch arrangements, Action 13 with transfer pricing documentation and country-by-country reporting, and Action 15 with the multilateral instrument. Action 2 is wrong because it concerns hybrid mismatches, not PE status.
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