The Arrival Of The New Beps Pe Clause In Actual Tax Treaties Via The Mli: Impact, Risks And Need For Further Regulatory Changes (Particular Focus On Spain)

The present article seeks to analyse the overall potential impact that the new permanent establishment (hereinafter PE) concept that has emerged from the Base Erosion and Profit Shifting (hereinafter BEPS) Project is expected to have as it is gradually incorporated into actual tax treaties worldwide by using Spain as an illustrative example. Firstly, the role that the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (hereinafter MLI) is playing in the implementation of the new rule in tax treaties will be analysed (section 1). Secondly, the wording and scope of the new PE clause will be scrutinized, highlighting its obvious resemblance to ideas foreseen in both prior versions of the Commentaries to the Organization for Economic Cooperation and Development Model Convention (hereinafter OECD MC) and certain domestic administrative resolutions and judgments (e.g., the ‘Spanish PE approach’, a doctrine widely held by the Spanish tax administration and some courts advocating for a singular interpretation of the PE clause and the rules attributing profits to it) (section 2). Thirdly, there will be an attempt to advance the effects of the arrival of the new clause in actual tax treaties in terms of the expected volume of affected treaties, the expected reaction of tax administrations and courts (in respect of unaffected treaties keeping the classic version of the PE concept), the potential coexistence between the new treaty PE rule and current domestic PE rules and, lastly, the expected (extra) tax revenues for jurisdictions hosting these new forms of PEs (section 3). The intention throughout the contribution is to portray the risks derived from the implementation of this new rule and the need for further regulatory modifications to counteract such risks. Finally, some final remarks will be put forward (section 4). Digital nomads’, work mobility, international taxation, tax residence, employment income, digital economy