This article examines certain European law issues that arise from the Authorized OECD Approach (AOA) and the new Art. 7 of the 2010 OECD Model, including the applicability of the EU direct tax directives (AOA requirement that assets be effectively connected with the PE), the EU compatibility of exit taxation (on outbound asset transfers by the PE) and possible withholding taxes (on outbound "notional payments" by the PE), as well as possible use of the Arbitration Convention to resolve any disputes under the AOA.