support@essaywritingexpert.orgA double taxation convention was concluded in 2008 between State A and State B based on the wording of the OECD Model in force at that time. Please advise the parties on the application of the tax treaty to the following situations:
(a) A Ltd, a resident of State A, regularly sends an employee to attend a trade fair in State B where she provides information to potential customers and discusses the terms of future orders for products. She then completes contracts when she returns to her office in State A. A Ltd is concerned that this activity may expose it to taxation and compliance obligations in State B.
(b) B Ltd, a resident of State B and a company engaged in advertising using electronic displays, has recently obtained permission to erect electronic advertising boards along a 1,000 km stretch of motorway in State A. For this work it will be sending over a team of workers who will carry out the work whenever a section of the motorway is closed for repairs. They will use mobile equipment which will move from site to site. Much of the preparation of each site will be carried out by local subcontractors. Once the boards are erected, B Ltd will operate the boards remotely from its base in State B. It is not clear how long it may take to complete installing all the boards. B Ltd is concerned that this activity may expose it to taxation and compliance obligations in State A.
- c) C Ltd and D Ltd are both incorporated in State A and are wholly owned subsidiaries of E Ltd, incorporated in State B. State A allows the tax-free transfer of machinery and other assets between members of a group of companies, provided all the companies in the group are resident in State A. Recently C Ltd has been told it cannot transfer assets to D Ltd without a charge to various taxes and wishes to know if it can challenge this ruling.
Would your answer to any of these parts be different if a) State A and State B had agreed that the convention between them was a covered tax agreement for the purposes of the MLI; or b) the treaty was based on the 2017 OECD Model? You may make any assumptions you think are appropriate in answering this question, but please explain those assumptions in your answer.