In general, branches and resident companies are taxed alike (i.e. taxation of corporate profits is postponed until profit distribution). As with companies, a PE's taxable base is a sum of taxable items consisting of profit distributions and deemed distributions. However, the PE's taxable base consists not only of taxable items incurred directly through the PE but also of any taxable items the non-resident allocates to the PE. Since technically branches and PEs cannot pay dividends, this fact makes it more difficult to determine what forms the taxable base for a PE or branch.
Last Reviewed - 10 January 2020