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Service PEs and ‘other personnel’

Francisco Alvarez Silva (Milestone Tax) answers a query on whether employees of another organisation can be considered ‘other personnel’ of a non-resident.
 

Question

Article 5(3)(b) of the United Nations Model Convention states that a non-resident will have a service permanent establishment (PE) in the source state if it furnishes its services thorough employees or other personnel. However can employees of another organisation be considered ‘other personnel’ of a non-resident? The OECD Commentary (at paras 42.21 and 42.22) provides some insight but there is no guidance from the UN as to what is considered ‘other personnel’. Consider for example a local hotel owner who engages an offshore management company to manage the hotel’s day to day operations for a percentage of gross revenue. According to the management agreement the local owner shall be the employer of all local staff to carry out day...

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