Abstract
One of the key cornerstones of the International Tax Architecture hitherto has been the notion of a Permanent Establishment (PE). However, the traditional concept of PE has been inadequate in addressing the tax challenges of digitalisation of the economy. Taking up the gauntlet, the Organisation for Economic Cooperation and Development (OECD) has unveiled the Outline of the Architecture of a Unified Approach on Pillar 1 on 29-30 Jan, 2020. With this, it has become clear that Amount A is the primary response of the International Tax community to the tax challenges posed by the digitalisation of the economy. In the latest statement of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS IF), OECD has pledged to continue its work on the key policy features of a consensus-based solution to the Pillar One issues. To that effect, it has divided the program of work for the technical and policy issues under Pillar One into 11 work streams. Among these, the second work stream is focussed towards the creation of new nexus rules and interactions with the existing treaty provisions. It is in this context that the essay analyses the inadequacy of the traditional concept of PE and discusses the concept of Amount A. Further, the essay focuses on the second work stream and proposes a number of indicators which could be factored into the new economic nexus for the Amount A of the ‘Unified Approach under Pillar One’
Recommended Citation
Naudiyal, Manoj
(2019)
"‘Amount A’ – OECD’s New Taxing Right and the Indicators for its Economic Nexus,"
National Law School Journal: Vol. 15:
Iss.
1, Article 10.
Available at:
https://repository.nls.ac.in/nlsj/vol15/iss1/10