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Protecting the tax base of developing countries4.3 Preparatory and auxiliary servicesArticle 5 (4) of the United Nations Model Convention, like the OECDModel Convention, lists a number of activities that are described in theCommentary as being “preparatory or auxiliary” and that do not resultin the creation of a PE. The basic idea is that a taxpayer resident in onecountry should be able to establish itself in the territory of the othercountry and carry on activities that are not central to the earning of itsprofits without any taxation in the other country. This is the case even ifmany or all of the enumerated activities are carried on over a long periodof time. Concern has been expressed that by manipulating and combiningvarious functions, taxpayers can establish a substantial presence inthe market jurisdiction that contributes to the profitability of the enterprisewithout those activities constituting a PE under the existing rules.4.3.1 Possible responsesA re-examination of the activities enumerated in the various paragraphsof Article 5 would allow a more nuanced treatment of situations whereactivities are combined. In addition, as indicated above, in some countriescourts have adopted an interpretive approach to the concept ofpermanent establishment that focuses more directly on the level of economicpenetration in the jurisdiction and less on the formal legal technicalitiesof the nature of the relationships involved. There are pros andcons to such an approach, which can create substantial legal uncertainty.4.4 OECD Action 7 — 2015 DeliverableAction 7 in the OECD Action Plan on BEPS expressly requires attentionto the issues of “commissionaire arrangements” and the exemptionsfor preparatory and auxiliary activities. The final recommendation onthis item will be made in September 2015.5. Protecting the tax base in the digital economy5.1 GeneralInformation and communications technology (ICT) have significantlychanged the ways that companies can do business globally. ICT raises19