The Comprehensive Guide to Permanent Establishment

A permanent establishment, commonly referred to as PE, is created when business activities are sufficient for an organization to be considered an ongoing presence in a country or state in which it is not incorporated or set up. If these business activities generate local revenue, the host country can impose corporate taxes at the local rate. Generally, a PE can be created for an organization by having employees or facilities in another jurisdiction. Generation of a regular revenue stream can also create a PE.