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The new ‘dependent agent’ definition

Question

Our client currently has a buy/sell group distribution network which has grown through acquisition. At one of the CFO’s previous organisations they operated a centralised buy/sell principle with commissionaires and the CFO is keen to explore whether this structure would be appropriate here. In particular the CFO considers that such a structure would increase central control and visibility over distribution activities and would increase the availability of consistent management information and optimise stock management. The CFO does not want to move any staff. In a post-BEPS environment what advice should I give my client to mitigate the risk of multiple permanent establishments and reduce the tax compliance burden?

Answer

Firstly we assume that the client has already considered the business restructuring issues and therefore in our response we will focus on the potential permanent establishment (PE) issues.

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