This study aims to develop a re-redefinition of the principle of Permanent Establishment (PE), especially for Over the Top (OTT) companies and discover the impact of Minister of Finance Regulations Number 35/PMK.3/2019 on tax avoidance. This research is a qualitative based research. Single subject experiment will be conducted for this research due to its basic intention to deliver in-depth understanding about 1 (one) specific issue to assist the development of the theory and finally fill the existing gap in practice. There are two important findings in this research. First, this study proposes a model for developing the definition of PE for OTT companies, namely, Virtual Establishment. Second, PMK is actually able to play a role as a coverage system in limiting grey activities in tax planning which possible to create and expand tax avoidance practice within the business practice