Covid Lockdowns Shouldn’t Create New Taxable Presence, OECD Says

Jan. 21, 2021, 2:02 PM

Temporary relocation of employees due to pandemic lockdowns should not change determinations of where companies have a taxable presence under treaties, the OECD said.

As travel restrictions continue, “jurisdictions may consider ‘stopping the clock’ for determining whether the PE threshold has been satisfied during certain periods where operations are suspended as a public health measure to prevent the spread of the COVID-19 virus,” the group said in guidance released Thursday.

  • At the start of the pandemic, companies worried they would unintentionally create new permanent establishments—a threshold for establishing taxable presence—in jurisdictions where they hadn’t previously had one, ...

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