BorderCrossings … with EY transfer pricing and tax professionals

Profit attribution to PEs: how do transfer pricing principles apply?

Related topics

While transfer pricing under the arm’s-length principle is most often applied to transactions between separate legal entities, it can also apply to attribute profits to permanent establishments. Under US tax treaties, Article 7 governs profit attribution to permanent establishments, and references the arm’s-length principle under Article 9. Under the Internal Revenue Code, the tax treatment of branches falls under the “effectively connected income” (ECI) rules.

This webcast will discuss the following questions:

  • What is the interaction of the treaty and ECI standards?
  • How has Article 7 evolved over the decades?
  • To what extent and how does the attribution of profits to permanent establishments under Article 7 apply insights from transfer pricing under the arm’s-length principle?
  • Why was the Authorized OECD Approach (AOA) developed, and what role does it play today?
  • How do Articles 7 and 9 differ from one another and why do taxpayers often conflate the two?

You might be surprised by the answers.

We hope you will be able to join us for this important webcast.


  • Mike McDonald, Managing Director, International Tax and Transaction Services – Transfer Pricing, Ernst & Young LLP

EY webcast managed and produced by Ernst & Young LLP’s Tax Technical Knowledge Services Group, Washington, DC: Lynn Fairfax.


CPE credits: 1.4


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