Milogolov N.S. Agent Representation of the Permanent Establishment: Problems and Prospects

Abstract: The subject of the research is the problems of taxation of non-resident companies that conduct their business activity in the Russian Federation through their dependent agents. The object of the research is the agent representation of the permanent establishment. This is an additional rule to the main type of the permanent establishment. The purpose thereof is to detect the relationship between foreign companies, i.e. revenue sources through a dependent agent but not fixed location of activity, and the country and later define their taxable base in this country. The methodological basis for the reseach involves the following research methods: historical, logical and statistical analysis, induction and deduction, comparative analysis, synthesis, modeling and analogies. The scientific novelty of the article is caused by the fact that the authors have applied an integrated approach to the analysis of problems elated to the functioning of the agent rule of the permanent establishment in the Russian Federation, both from the point of view of taxpayers, tax administration and international principles of taxation. The main conclusion is that the effective version of the rule does not conform to the modern economic situation, moreover, there are many specific Russian problems such as uncertain interpetation of this rule by Russian courts, double tax treaty applied to goods imported through an agent, undeveloped procedures for recording, regulation and determination of the tax base for the agent representation of the permanent establishment. 

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