Attribution of profits to permanent establishments of banks

The author undertakes a critical and thorough analysis of the OECD Dicussion Draft in general and, more specifically, of the the application of the Discussion Draft to the banking sector. The main issue in this is the attribution of free capital to permanent establishments of banks. This practice-oriented article contains useful links between the Discussion Draft theory and its possible applications. The author concludes inter alia that currently the Discussion Draft still lacks practicality, merely provides a framework of principles and fails to provide guidance to taxpayers on how to apply them. Furthermore, if the Discussion Draft is not amended, the author foresees that banks shall have to implement costly new reporting systems and administrative procedures.