The OECD published an updated Model Tax Convention (MTC) and Commentary in late 2026, with the most noteworthy changes addressing the permanent establishment (PE) article concerning ‘fixed place of business’ in the context of remote working. As highlighted in the 8 October 2026 Tax Matters Digest, KPMG conducted a survey across 22 jurisdictions in its global transfer pricing network to assess practical issues arising from mobile workers and key decision-maker locations. The survey results, discussed in a Bloomberg Tax article linked by KPMG, reveal significant divergence in how tax administrations apply PE rules to remote employees. This update is critical for multinationals managing cross-border workforces and transfer pricing compliance.
Key Takeaways
- Remote Work PE Clarification: The updated Commentary provides new guidance on when a home office or temporary workspace constitutes a fixed place of business, affecting PE risk assessments.
- Global Survey Highlights Divergence: KPMG’s 22-jurisdiction survey shows wide variation in enforcement, creating compliance complexity for multinationals with distributed workforces.
- Decision-Maker Location Scrutiny: Tax administrations increasingly focus on where key strategic decisions are made, linking this to PE and profit allocation under transfer pricing rules.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement