Permanent Establishment

Permanent Establishment (PE) refers to a fixed place of business in a foreign country where a company conducts its activities, which may subject it to local tax laws. Common examples include offices, branches, or factories. If a business operates in another country through a PE, it typically pays taxes on the income generated there. Understanding PE is crucial for companies to comply with international tax regulations and to avoid double taxation on the same income, thereby clarifying their tax obligations in different jurisdictions.