Snap to Pay Tax in U.K., but Denies Choosing London for Headquarters

Worldwide Tax Daily
January 12, 2017

Douglas S. Stransky was quoted in an article published on January 12, 2017 in Tax Analysts' Worldwide Tax Daily, entitled "Snap to Pay Tax in U.K., but Denies Choosing London for Headquarters."

In the article, Mr. Stransky comments on the news that Snap Inc., the U.S.-based company behind Snapchat, will book its advertising revenue from the U.K. and other countries through a U.K. entity so it can pay U.K. taxes. Mr. Stransky said that "action 7 of the OECD’s base erosion and profit-shifting project addresses common tax avoidance strategies used to get around the existing definition of a permanent establishment and aims to prevent the exploitation of exceptions to the PE definition, particularly those related to activities that are 'preparatory and auxiliary' in nature, which is especially relevant in the digital economy. [Thus], to the extent that tech companies evaluate the question of PE through the action 7 lens, they will conclude that they, in fact, have PEs in particular countries and will begin to record revenue there."

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