On 17 October 2014, the German ordinance for the application of the arm's length principle to permanent establishments (PEs) was published in the Official Gazette, and entered into force on 18 October 2014. Under the ordinance, PEs are effectively treated as functionally separate entities in line with the authorized approach of the OECD as per Article 7 of the OECD 2010 Model Convention.

The o…