Automation Complicates Interpretation of EU Fixed Establishment Rule

An EU value-added tax exemption for companies’ foreign operations that aren’t considered “fixed establishments” may need to be redefined in the context of increased automation.

Debate over whether a facility of a company outside its home country should be considered a fixed establishment has already triggered a large number of legal cases and would likely trigger more as facilities are increasingly managed remotely and digitally, according to speakers at a CFE Tax Advisors Europe event in Brussels on Thursday.

The many cases brought to the EU courts on the issue shows there is “a problem with this concept of fixed ...