On 22 March 2018, the OECD published further guidance on the attribution of profits to permanent establishments (PEs), in light of the changes to the definition of a PE resulting from the OECD's Base Erosion and Profit Shifting (BEPS) project.

The BEPS changes to the definition of a PE aim to reduce the potential for companies to claim they do not have a PE in a country in which they do business. The changes address, in particular, “commissionaire” and similar strategies. These, and other, changes have been “introduced” via a multilateral instrument (MLI). The MLI, published on 24 November 2016, enables countries to amend their existing double tax treaties all at once18. Although 67 countries (including the UK) had signed the MLI by 7 June 2017, the UK has reserved its right not to apply the MLI insofar as it deems there to be a PE where a person acts on behalf of an enterprise and, in doing so, habitually concludes contracts, or habitually plays the principal role leading to the conclusion of contracts that are routinely concluded without material modification by the enterprise.

The OECD guidance can be viewed here.