Attribution and allocation of income from electronic commerce (IV)

… Policy aspects
From a policy perspective, the strict functional analysis based on the functions
performed, assets used and risk assumed by the PE may not be adequate in the
field of electronic commerce. If the analysis were restricted to the technical functions of the server, then the amount of profits attributable to it would be limited.
This may not be fair. Indeed, according to some commentators, even if the intangibles such as the software and intellectual property rights belong to an enterprise sited in another state, their value (or increase of value) is also caused by the access to the customer base developed by the server.38 In addition, while it is true that the Internet has reduced the cost of intermediation, the profits attributed to this function should also take into consideration the broad and unlimited availability of the server.
In any event, there are no signs that the Swiss practice will change in the near
future. A solution to ensure proper and fair allocation of profits between a PE and the head office requires a broad international consensus.