PE examples & exercises

PE examples
• A company resident in Mexico concluded a contract with an individual
resident in Canada, according to which the individual provided
training to the company’s staff over a 20 month period. The training is
provided at the company’s premises and the individual meets the
employees there and is provided with an office to prepare his classes.
Do we have a PE?
• A company resident in the UK delivers recruitment services in India.
For this purpose web space and a telephone address in India have
been rented, that serve only for communication purposes. Does the
‘virtual office’ constitute a PE?
PE examples
• An Indian company marketed certification programmes offered by a
US-based organization. The company’s main activity was the
collection of registration forms and examination fees from Indian
residents. Does the Indian company constitute a PE for the US
organization?
• Since the company did not conclude any contracts on behalf of the US
organization and did not maintain a stock of goods or secure orders for the US
organization, it was found to be an independent agent (not a PE).
• Allianz Insurance company is an insurance company resident in South
Africa. For the collection of insurance premia across the world, it
employs several agents. Are these agents PEs? Art. 5 (6) UN MC 
YES.
PE examples

• An Irish computer manufacturer has a 100% share in an Icelandic

subsidiary. This subsidiary has the authority to conclude contracts in
the name of the parent company and habitually exercises this
authority.
• The subsidiary constitutes an agency PE for the Irish parent and the parent
becomes liable to tax in Ireland in respect of the profits attributable to the
Icelandic PE. The Icelandic subsidiary is subject to tax in Iceland, because it is
a resident there.