International - Status of Implementation of the Authorized OECD Approach into Domestic Tax Law and Tax Treaties – Part 1
- S. Huibregtse; L. Verdoner; I. Valutyte; R. Offermanns
- European Taxation, 2015 (Volume 55), No 8
- 13 July 2015
This article examines profit/loss allocation in a headquarter/branch scenario. Part 1 discusses the actual split between a head office and branch from a theoretical perspective, discusses basic concepts derived from public international treaty law, the notion of Key Entrepreneurial Risk-Taking Functions versus Significant People Functions and the Authorized OECD Approach (AOA). Part 2, to be published in European Taxation 9 (2015), continues to analyse the AOA, looks at the question of whether adequate capital is allocated to the branch as a fictitious separate entity and outlines court cases, tax policy and advance pricing agreement/mutual agreement procedure implications.