Abstract: The subject of this research is the taxation of permanent representations of foreign companies, while the object is the permanent representations of foreign companies. The author examines such aspects of the topic as the impact of international agreements on the avoidance of double taxation upon the conduct of activity by the permanent representations in the territory of the Russian Federation, calculation of profits of permanent representations, and potential conflict situations due to the differences in the Russian tax legislation and the concluded tax agreements. The article explores the methods of transferring expenses confirmed by the accounting source documents, from permanent representations to the foreign parent companies in for the purpose of reduction of tax basis as well as presents the relevant arbitrage practice on the topic. The scientific novelty is substantiated by the use of permanent representations by both Russian and foreign companies, relevant problematic of their taxation in the Russian tax jurisdiction, which is the result that tax agreements contain only general norms and principles of calculating the tax basis for permanent representations. As a conclusion, the author makes proposals on specification of tax agreements with regards to toughening the requirements to calculation profits of the permanent representations and its redistribution, proof of expenses that could be unlawfully used or transferred to the foreign parent company to reduce the tax basis of the permanent representations.

Abstract: The subject of this research is the taxation of permanent representations of foreign organizations. The object of this research is permanent representations of foreign organizations. The author explores such aspects of the topic as prevention of tax base erosion, modernization of international tax relations, impact of international tax agreements upon the taxation legislation of the Russian Federation with regards to corporate income tax and transfer of expenditure by head organization to the permanent representation. Analysis is conducted on the problematic of Russian taxation of the permanent representations of foreign organizations, with consideration of the accepted international tax standards. The article examines the promptness and factors of implementation of new tax measures aimed at countering tax evasion. The scientific novelty is substantiated by the usage of permanent representations by Russian and foreign companies, remained problematic of their taxation in the Russian tax jurisdiction, flaws in the current tax norms, as well as the impact of international tax agreements upon Russian tax normative document. The main conclusions contain recommendations on modernization of the existing in Russia tax rules in the context of determination of the tax base and application of the “principle of gravity”, increase of accuracy in determination of the actual results of activity of the permanent representations for improving efficiency and achieving balanced level of taxation of the permanent representations, which also function within the framework of a single technological process.

Abstract: The subject of this research is the taxation of permanent establishments of foreign organizations on the international level. The object of this research is the permanents establishments of foreign organizations. The author examines such aspects of the topic as the use of agreements on evasion of double taxation, counteracting tax base erosion and aggressive tax planning, struggle against double taxation, international tax information exchange, tightening control of the taxpayers’ income. Special attention is given to the practice of international taxation in the countries that are the sources of income of the branches of foreign companies. The author analyzes the changes of trends in international taxation of permanent establishments of foreign organizations based on studying the international tax documents. The scientific novelty is defined by stable use of permanent establishments within the structure of foreign companies, and their recognition on the international level as an independent taxpayer. The main conclusion consists in recommendations on modernization of international tax instruments that would contribute to counteracting the evasion of taxation, as well as allow stronger control of obtaining by foreign taxpayers, who form permanent establishment in the territory of foreign countries, income from their activity.