An overview by Garrigues, Taxand Spain:
Alvaro de la Cueva, a Partner at Spanish Taxand member firm, Garrigues, has published a blog in Expansion analysing a recent court ruling regarding the calculation of income for tax purposes in permanent establishments (PE).
The ruling states that a PE’s own administration expenses must be considered, differing from the OECD model. Only the reasonable part of direction and general administration expenses related to the PE should be included. The ruling emphasises the need for detailed analysis by tax authorities and challenges traditional approaches, highlighting the importance of accurate income declaration regulation.
Read the full blog here.
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