Austria MOF Clarifies PE Status of Nonresident Subcontractors Under OECD Model Tax Convention

The Austrian Federal Ministry of Finance Dec. 16 posted BMF Letter No. 2025-1.019.512, clarifying the permanent establishment (PE) status of nonresident subcontractors under the OECD Model Tax Convention. The clarification includes that: 1) the existence of a PE for a subcontractor must be assessed from the subcontractor’s perspective, regardless of any connection to the general contractor; 2) temporary or short-term activities by a subcontractor at various, non-contiguous sections of a railway network don’t constitute a fixed place of business and thus don’t create a PE, especially if assignments are independent, short-term, and separated by significant interruptions; and 3) multiple independent ...