This scientific publication delves into the concept of the permanent establishment in Article 5 of the latest OECD Model Tax Convention (2017). Using a legal methodology and stringent rigor, the author defines this legal institute by meticulously analysing its historical evolution. Subsequently, taking into account the proposals made in the OECD's Action Plan on Base Erosion and Profit Shifting, specifically in its Action 7 titled, Permanent Establishment Status, it delineates the new typology of permanent establishments incorporated into the OECD Model Convention. The permanent establishment is a tax concept that signifies the presence of a non-resident entity in the domestic economy of a country, and therefore, if allowed by domestic and agreed tax law, the State where it is located may tax the income attributable to it. For this reason, the relevance and timeliness of this article are undeniable, as it defines the new typology of this legal institute and analyses the tax consequences and implications for States.