PE identification and follow up

Managing tax risks

Financial consequences associated with the qualification of permanent establishment, specifically in terms of company taxes and / or VAT, can be catastrophic because of the possibility for the French Tax Authorities to (i) extend the statute of limitations, (ii) apply additional penalties that can amount to 80% of the tax reassessments and (iii) engage criminal prosecution against the directors.

Tax audits are becoming increasingly frequent and the French Tax Authorities have effective tools to carry out their investigations (specifically due to increasing tax transparency and through online procedures allowing electronic data processing).

Within this tax environment, it is key for companies to know their areas of risk in case of a tax audit, as you can better control the risk when you are aware of it.

Our experience in identifying a permanent establishment and managing the related risks will allow you:

  • To reassure your organization, or
  • To highlight the risks attached to the existing of a permanent establishment and implement appropriate measures in order to limit such risks for the past and for the future.