TYPES AND KEY CHARACTERISTICS OF A NON-RESIDENT’S PERMANENT ESTABLISHMENT: A COMPARATIVE LEGAL ANALYSIS

Abstract

Introduction. The study of the concept of a non-resident’s permanent establishment is of particular relevance in the context of the globalization of economic processes and the growth of cross-border activities. Determining the existence of a permanent establishment directly depends on the clear identification of its characteristic features in the non-resident’s activities within the jurisdiction where the non-resident is present. In this context, it is worth emphasizing that types of permanent establishments can differ significantly in their characteristic features, and therefore, there is a need to systematize and classify them.

This article analyzes the types of permanent establishments listed in the Tax Code of Ukraine. A comparative analysis is conducted of the defining characteristics of the types of permanent establishments specified by the Tax Code of Ukraine, the provisions of Ukraine’s double taxation treaties with other states, and the OECD Model Convention and its commentaries.

Purpose. The purpose of the article is to systematize and classify the types of permanent establishments of non-residents in accordance with the provisions of the Tax Code of Ukraine, the OECD Model Convention, and the UN Model Convention, as well as to identify key differences between national and international legal regulations.

Materials and Methods. The methodological basis of the study consists of comparative legal and logical-dogmatic methods. The provisions of the Tax Code of Ukraine, international tax conventions, commentaries thereto, as well as the practice of the Supreme Court of Ukraine were analyzed. Scientific works by foreign and domestic researchers in the field of international tax law were utilized.

Results. The study found that Ukrainian legislation distinguishes five main types of permanent establishments: basic, construction, service, agency, and warehouse. It was determined that each of these types has specific characteristics and criteria for application. A comparative analysis showed that the provisions of the Tax Code of Ukraine are in some cases broader (particularly regarding the service and warehouse types) than the OECD’s approaches, but at the same time narrower compared to Ukraine’s treaty practice, which provides for additional types of permanent establishment, notably the insurance type. Legal uncertainty regarding the relationship between the general definition of a permanent establishment and its specific types was also identified.

Prospects. Further research should focus on harmonizing national tax legislation with international standards, particularly the provisions of the OECD Model Convention and the UN Model Convention. It is also promising to analyze the impact of differing interpretations of the criteria for a permanent establishment on legal practice and to develop recommendations for resolving regulatory conflicts.