Practice guide: handling commissionaire structures

Commissionaire structures are often used to recognise profits outside high tax jurisdictions, and it is therefore important that a permanent establishment is not created. The functions and risks assumed by a commissionaire are usually limited in order to support the level of profits recognised in the commissionaire company itself.

Two recent cases in France and Norway (Zimmer and Dell) highlight the risks of a commissionaire creating a permanent establishment, and it is possible to draw out some steps which can be taken to reduce this risk. This article outlines how commissionaire structures operate and the tax risks which can arise from them.