European Union Direct Taxes

Permanent Establishment is a vital concept in international taxation. While for direct taxes, it is mainly defined by the OECD Model Convention, the European VAT Directive and its implementing Regulation provide an EU-wide approach for VAT.
Difficulties arise as terminology and definitions in indirect and direct tax diverge. Moreover, countries have implemented and interpreted the EU and OECD rules in a different way, impacting on issues like cross-border reorganisations, transfer pricing, taxation of dividends and interest and royalties, tax residence, temporary and permanent transfer of assets, place of supply and VAT liability.
In both direct and indirect tax, the concept of Permanent Establishment has undergone very recent changes: The 2010 changes to the OECD Model Convention and Commentary, and in particular the new Art. 7, will be adopted in national law, as speakers from the Netherlands and Germany will report. The effect of the new definition on treaties with other countries will also be considered.
Some of this topic is addressed in the new book "European Union Direct Taxes", by the International Tax Professor Salvador Trinxet Llorca.
In indirect tax, the current more important issue is the practical consequences of the adoption of the Regulation implementing the EU VAT Directive in January 2011.

Barrister’s activity

Where an entity is not itself carrying on a reserved legal activity, e.g. some procurement or block contracting vehicles or other intermediaries, there is no need for it to be regulated. Use of limited companies ancillary to self-employed practice appears therefore to be perfectly lawful, provided that they are not themselves carrying on reserved legal activities. In practical terms, this appears to the Board to depend on certain conditions being met. Any barristers considering the use of such a vehicle would be well-advised to obtain specialist legal advice on the structure and operation of the entity in relation to the terms of the Act. Firstly, this must mean that the barristers, who are carrying on the reserved legal activities, must not be the agents of the entity. Secondly, the entity must not be contracting to provide International legal services, only to procure that others provide them, otherwise it is possible that it would be taken to be carrying on reserved legal activities. Thirdly, the arrangements for payment of the vehicle must not amount to referral fees in breach of rules 307(d) or (e) of the Code.