Stabile organizzazione

Under Italian law the permanent establishment (“p.e.”) plays a role in a number of taxes, although it is the income taxes and VAT the areas where such entity is mainly investigated by scholars and commentators. Its relevance and definition differ in the two areas of tax law. In particular under income tax law the entity, the notion of which, with a few exceptions, mirrors the OECD Anti-Double Taxation Model Convention’s, constitutes a criterion to locate the enterprise’s income, being still debated whether or not it may also have a certain relevance with respect to the nature itself and related classification of the Italian sourced income (as an enterprise’s income). Other functions of the p.e. which is worth mentioning relate to the admission to the so-called domestic consolidated tax regime, granted to EU controlling companies with a p.e. in Italy, and the withholding tax agent’s obligations which must be fulfilled also by foreign entities having a fixed base in Italy (and, accordingly, by any entity having a p.e. in Italy). Very sketchy is the Italian framework concerning the calculation of the income attributable to a p.e. and this holds true also when the domestic foreign tax credit regime related to the income of a foreign p.e. of an Italian resident enterprise comes into consideration. With regard to VAT, while the main role of the p.e., in compliance with both the Sixth and Re-Casting Directives, is to locate services’ supplies (so as to exclude the taxing power of the State of “prime” establishment), its relevance cannot be denied also in cases where supplies of goods are concerned. For instance for VAT purposes the presence of a p.e. in Italy – the notion of which in the VAT area is influenced by the ECJ case law - must be reported to the competent tax authorities regardless of the type of supplies which are provided through it. Despite the recent FCE Bank ECJ ruling, there are a few cases where a p.e. can be regarded as an autonomous VAT entity, separated from its head office, when dealing with same