Should webshops and MNEs that are using commissionaire and similar strategies worry about their tax position?

Following questions received from clients we have decided to provide some more information regarding the Action 7 anti-BEPS measures in relation to agency and commissionaire structures, auxiliary PEs (for instance warehousing) and limited risk distributors.

Dell case: Why do we need the BEPS project?

Recently the Spanish Supreme Court made a landmark decision on the existence of Permanent Establishments (“PEs) in foreign jurisdictions. This decision, if used by tax administrations in other countries, may be far-reaching and may affect many businesses engaged in cross-border activities. Interestingly it is not the proposed Action 7 BEPS measures that should concern businesses. Instead, the broad approach to the interpretation of PEs should be their main concern as this potentially is a source of uncertainty. Even before the Action 7 BEPS measures are implemented, companies may have a PE abroad. The decision of the Spanish Supreme Court in the Dell case illustrates that tax authorities may apply a broad interpretation in this respect.

Netherlands grows as preferred holding jurisdiction for hosting Indian investments

In recent years both Mauritius and Singapore were the leading jurisdictions for hosting investments into India. According to estimates, more than 30% of all investments into India have been structured via Mauritius or Singapore. Following the amendments to the India – Mauritius Double Taxation Avoidance Agreement (“DTAA”), the interaction thereof with the India – Singapore DTAA, the amendments to the India -Cyprus DTAA, and the impact of the Multilateral Instrument (“MLI”) on treaties, multinational enterprises (“MNEs”) may consider exploring other jurisdictions such as the Netherlands for hosting investments into India.