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- A pre-requisite for activities of a fixed place of business to be preparatory or auxiliary in character to be exempt from PE treatment;
- An expansion of the PE definition to include an employee or agent that 'habitually concludes contracts or negotiates the material elements of contracts';
- An 'anti-fragmentation' rule that will allow tax authorities to look at combined activities of any connected enterprises in one jurisdiction and apply the 'preparatory or auxiliary' test to the combined activity;
- A clear independent agent exemption with a 10 per cent threshold for exclusivity (e.g. if more than 90 per cent of the business is with one connected party it would not be possible to use the exemption);
- A 30 day physical presence test rule for connected enterprises.
Published May 26, 2015
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