{"id":469,"date":"2018-06-22T09:33:38","date_gmt":"2018-06-22T09:33:38","guid":{"rendered":"http:\/\/159.65.127.138\/?p=469"},"modified":"2025-08-22T14:45:09","modified_gmt":"2025-08-22T12:45:09","slug":"extended-definition-of-permanent-establishment","status":"publish","type":"post","link":"https:\/\/taxing.it\/it\/extended-definition-of-permanent-establishment\/","title":{"rendered":"Extended definition of Permanent Establishment"},"content":{"rendered":"
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Italy’s 2018 Finance Act made some significant changes to the definition in the domestic Tax Code of Permanent Establishment (PE).<\/p>\n

Specifically the changes:<\/p>\n

    \n
  • extend the definition of agency PE;<\/li>\n
  • make ALL the listed activities (deriving from the OECD standard model) which are deemed not to give rise to a PE conditional on the activities being preparatory or auxiliary in nature. This is a significant departure from the OECD model which allows foreign companies to maintain stocks of goods in Italy at any stage of the business process;<\/li>\n
  • include an \u2018anti-fragmentation rule”.<\/li>\n<\/ul>\n

    A translation of the revised art. 162 of the Code is shown below.<\/p>\n

    Often the definition in an applicable double treaty will override the domestic provisions.  But in the past the Italian courts have been willing to deny the application of a more favourable treaty provision in cases of perceived tax avoidance or treaty shopping.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    \n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"

    Italy’s 2018 Finance Act made some significant changes to the definition in the domestic Tax Code of Permanent Establishment (PE). Specifically the changes: extend the definition of agency PE; make ALL the listed activities (deriving from the OECD standard model) which are deemed not to give rise to a PE conditional on the activities being […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,7,713],"tags":[],"class_list":["post-469","post","type-post","status-publish","format-standard","hentry","category-technical-update","category-technical-resource","category-doing-business-in-italy"],"yoast_head":"\nExtended definition of Permanent Establishment | Taxing.It<\/title>\n<meta name=\"description\" content=\"Italy's 2018 Finance Act made some significant changes to the definition in the domestic Tax Code of Permanent Establishment (PE). 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