In its private ruling No. 03-08-02 of 24 July 2006, the Ministry of Finance clarified the definition of a permanent establishment under the provisions of the tax treaty between Russia and Austria, which is identical to the definition of a permanent establishment under the OECD 2005 Model..
Under the clarification, supervisory activity of a non-resident supplier of machinery regarding the installation thereof may constitute a PE even if the installation of machinery is carried out exclusively by the resident purchaser of the machinery.
Although the Ruling does not apply directly to other tax treaties, it indicates the position take by the Ministry of Finance regarding interpretation of the definition of a PE. This may indirectly affect similar services performed in Russia by non-residents if the applicable tax treaty contains a definition for PE similar to that of the OECD 2005 Model.
We’re here to answer any questions you have about the Orbitax products and services.
We’re committed to providing high value, low cost tax research and management solutions.
Our Twitter account is where you can find latest information, news updates, offers and lots more.