OECD releases fourth batch of Administrative Guidance, including new rules for allocating taxes to foreign PEs. The June 2024 Administrative Guidance provides a common mechanism to push down an amount of the taxpayer’s current taxes to a PE, and a “branch accounting” mechanism to push down an amount of deferred tax that is reflected in the financial accounts of a Main Entity with respect to the assets and liabilities of a foreign PE. The Guidance also permits making a Five-Year Election on a jurisdictional basis to exclude allocations of deferred tax expense, and extends earlier guidance on Substitute Loss Carry-forward Deferred Tax Assets (DTAs) to foreign PEs.
Source EY
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