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4.1. Domestic PE of a Foreign Entity

A foreign business is deemed to have a permanent establishment (PE) in Andorra if it carries out any or part of its activities in the country through an established place of business. Generally, the following forms of business activity are deemed to constitute a PE in Andorra:

  • A fixed place of business where the activities of the company are partially or totally carried out;
  • a branch of a foreign enterprise;
  • An administrative headquarters of a foreign enterprise
  • an office of a foreign enterprise;
  • a warehouse;
  • a factory or a plant;
  • a workshop;
  • a mine, quarry, oil or natural gas well or any other place of extraction of natural resources;
  • a building site, an installation project or an assembly project, where such site or project or activities continue for a period of more than twelve months.

However, the following places are not considered as a PE of a foreign entity in Andorra:

  • Using facilities for the storage or display of goods or merchandise belonging to the company;
  • Using the stock of goods or merchandise belonging to the company for storage or display;
  • Using an inventory of goods or merchandise belonging to the enterprise for the sole purpose of being processed by another enterprise;
  • Using a fixed place of business for the sole purpose of purchasing merchandise or collecting information for the enterprise;
  • Using a fixed place of business for carrying out of activities of preparatory or auxiliary character.

The Andorran domestic law does not specifically include in its PE definition, the constitution of service PE on completion of a specified number of days. Also, a number of Andorran tax treaties (for example, those with Cyprus, France, Portugal, Spain, and the United Arab Emirates) do not provide specifically for Service PE.