Status of Implementation of the Authorized OECD Approach into Domestic Tax Law and Tax Treaties

Part 1.

By: Steef Huibregtse, Louan Verdoner, Igne Valutyte and René Offermanns.

This article examines profit/loss allocation in a headquarter/branch scenario. Part 1 discusses the actual split between a head office and branch from a theoretical perspective, discusses basic concepts derived from public international treaty law, the notion of Key Entrepreneurial Risk-Taking Functions versus Significant People Functions and the Authorized OECD Approach (AOA). Part 2, continues to analyse the AOA, looks at the question of whether adequate capital is allocated to the branch as a fictitious separate entity and outlines court cases, tax policy and advance pricing agreement/mutual agreement procedure implications.

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Status of Implementation of the Authorized OECD Approach into Domestic Tax Law and Tax Tre.

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