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Maybe a decade ago, people used to joke that no one uses LinkedIn. Now, it’s hard to imagine life without it.

Before social media, the go-to job board for journalists was run by Columbia University, JournalismJobs.com. Nowadays, journalists as well as everyone else rely on LinkedIn for job postings. In fact, they pop into my feed even when I’m not looking for work.

In fact, without LinkedIn it’s possible this newsletter never would have gotten off the ground. I used Twitter (or as it’s almost never called, “X”) to promote to those who already followed me, but it was through LinkedIn that it began to spread to friends of friends, colleagues of colleagues, and ending up with subscribers from around the world.

All of this is to say, LinkedIn has become indispensable to modern professional life. And, it has become an important tool for tax authorities in international tax issues, as well–one way that auditors can make sure that structures and transfer pricing being presented by the taxpayer match up with the realities on the ground. This has been a trend for years now, and as the system moves toward a people-based paradigm, it’s likely to become an even stronger dynamic.

Perhaps the area where this is most crucial is with permanent establishments, the standard under most double taxation treaties by which a foreign corporate entity is deemed to have created a taxable nexus in a jurisdiction. This ended up being addressed in the Organization for Economic Cooperation and Development’s 2015 Base Erosion and Profit Shifting project, and has maybe dropped from the radar a bit as companies retooled their structures. But as countries continue to debate whether a digital PE concept should be added to the tax rules, it continues to be pivotal.

Under many corporate structures, especially for companies with a strong online component, transactions would be made with a central regional entity, not located in the same jurisdiction as most of the customers. After all, if the sales are happening on the Internet, the party on the other end could exist almost anywhere.

But that doesn’t mean that the corporation is totally absent from the customer’s country. In some cases, for smaller companies that really can conduct all of their operations online, that may be true. For the tech giants, most of the time there will be actual people or offices in that jurisdiction–they just won’t be the ones doing the sales. On paper, at least.

The standard under most tax treaties is whether those workers are “dependent agents” of the foreign entity doing the sales. That is a strong factor for determining whether a PE exists, and could mean that the tax authority of that jurisdiction can tax income from those sales. It also gives the tax authority more leverage for other avenues of taxation, such as transfer pricing. It’s always easier to tax someone in your country, than someone who’s outside.

The current standard for a dependent agent (modified after 2015) is whether one “habitually plays the principal role leading to the conclusion of contracts that are routinely concluded without material modification by the enterprise.”

That’s a rather nuanced definition, which attempts to deal with company representatives who really are the ones that close the deal, but then send the contracts to be rubber-stamped by an entity in a tax-favorable jurisdiction.

Controversy around some of the biggest corporate tech giants’ tax structures led to that change, including a Reuters investigation into Google in 2013. It found that the company employed 13,000 employees who seemed like salespeople–and who often described themselves that way on LinkedIn–but weren’t considered dependent agents. It prompted an investigation from the British Parliament’s Public Accounts Committee, which issued a scathing report of its own.

Google argued that there was a distinction between those who actually made sales, and those who promoted the service as a whole. Functions like advertising and promotion are considered auxiliary and, at the time, would not necessarily trigger a PE on their own. This got into abstract debates about the nature of sales in the online era and whether an algorithm or formula could, in effect, sell itself.

The LinkedIn profiles, for sure, made Google’s life a lot more complicated.

That’s just one example. The BEPS project also created new rules for the pricing of valuable intangible assets, like intellectual property, including instructions to look for where those intangibles are “developed, enhanced, maintained, protected and exploited”--the DEMPE functions.

A LinkedIn profile can’t tell you all of that, but it might give hints about how high-ranking a scientist or computer engineer really was in an operation.

“Economic substance” has been the buzzword in international taxes for the last 10 years or so–about the same time that social media sites like LinkedIn have become an essential part of moving up in a career.

Of course, everyone puffs up their LinkedIn profiles just a bit. Like resumes, they’re all about putting your best foot forward. Companies normally have minimal rules on social media use, and tax departments aren’t going to have an easy time chiding employees to make sure their profiles match the company’s statements. And since tax audits normally look at tax returns from years ago, the question could involve profiles of ex-employees, where the tax department will have no control at all.

It’s a valuable resource for tax authorities looking for ways to verify a company’s assertions in an audit or tax return–and a challenge for tax departments to ensure that everything goes together.

Contact the author at amparkerdc@gmail.com.