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In the case of residents providing outbound services (i.e. services performed in another jurisdiction or provided to a resident of another jurisdiction), few branch reports indicated any special rules in relation to income derived from such services. Generally, it would appear that income from cross-border services provided by resident enterprises is treated as ordinary income and subject to the same tax treatment as other categories of business income. An exception to this is identified in the Chilean report, which noted that in the case of services, unilateral foreign tax credits are provided only in respect of taxes levied on payments made abroad as remuneration for technical assistance and other similar services and for services rendered through a PE in the other jurisdiction.

In the case of income derived by non-resident SPs from the performance of services in a jurisdiction, or provided to residents of that jurisdiction, significant variations in source taxation were reported.

The most common approach, found in nearly half of the reporting jurisdictions, is to treat income from the provision of services as ordinary income that is subject to the usual rules applicable to the determination of taxable income. In these countries, non-resident SPs are taxed on a net basis on services income arising in the jurisdiction in the same way as other categories of business income. However, among these jurisdictions there are different approaches to source taxation. In some jurisdictions, only income attributable to a PE situated in that territory (or income that meets some other threshold) will be subject to tax in that jurisdiction, while in others, the income is taxable irrespective of any threshold. An interesting variation on this approach is found in the UK, where non-resident SP companies are taxable on their services income only if the income is attributable to a PE in the UK, but non-corporate entities are, at least theoretically, taxable on their net services income irrespective of whether such income is derived through a PE.

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