U.S. Income Tax Treaties — Permanent Establishments and Related Business Provisions (Portfolio 6860)

Portfolio Author Rod Donnelly

Rod Donnelly

Partner

Morgan, Lewis and Bockius, LLP

Portfolio Author Philip McCarty

Philip McCarty

Partner

McDermott, Will & Emery LLP

At a glance

I. Introduction and Overview
II. Article 5 — Permanent Establishment
III. Article 6 — Income from Real Property
IV. Article 7 — Profits Attributable to a Permanent Establishment
V. Article 8 — Shipping and Air Transport
VI. Article 9 — Associated Enterprises

Abstract

This Bloomberg Tax Portfolio analyzes U.S. income tax treaty provisions that relate to business income associated with permanent establishments, the specialized treatment of real estate, and international shipping and aircraft activities. In addition to discussing the nature of activity conducted by, and the type of income earned by, treaty country residents that may be taxed in the other treaty country, the Portfolio discusses the amount of income that may be taxed in the treaty country in which the income arises under the treaty rules governing business profits attributable to a permanent establishment, the specific treaty provisions governing real estate and international shipping and aircraft activities, and the treaty principles governing the allocation of income among associated enterprises.

In particular, this Portfolio focuses on Articles 5 through 9 of the U.S. and OECD Model Income Tax Treaties, comparing the relevant 2006 and 2016 U.S. Model Income Tax Treaty articles and the corresponding articles in the OECD Model Income Tax Treaty through its 2017 update.

 

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