There is a lack of harmonised guidance concerning the definition of a Fixed Establishment (FE). This important concept is being interpreted differently across Member States of the European Union, causing commercial uncertainty, as well as situations resulting in double or non-taxation. As a rule of thumb, tax authorities across Member States often casually conclude that the existence of a Permanent Establishment (PE) presupposes also the existence of an FE, albeit these being two very different concepts, serving two very different purposes. This book examines the above.

It provides an in-depth examination of the definition of the FE, arising from EU legislation, as well as from the judgments of the European Court of Justice. It then describes the PE concept and concludes with an examination of the similarities and differences between the FE and the PE, arguing that these are two very different concepts, serving two different purposes and should not therefore be linked in the way with which tax authorities do.

This book represents Alexis Tsielepis’ thesis submitted to the VAT Forum in fulfilment of the requirements for the degree of ‘Expert in European Value Added Tax’ for the class of 2014/2015.