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4.1. Domestic PE of a Foreign Entity

Effective 1 August 2020, a new definition of permanent establishment is introduced under the Act. A permanent establishment means a fixed place of business through which the business of a person is wholly or partly carried on and includes the following:

  • A place of management, branch, office, factory, warehouse, or workshop except a liaison office;
  • A mine site, oil or gas well, quarry, or other place of exploration for, or extraction of, natural resources;
  • A building site, or a construction, assembly, or installation project, or supervisory activities connected with such site or project, if the work is carried out for more than six months;
  • The furnishing of services including consultancy services by a person, including through employees or other personnel engaged by such person, for the same or a connected project by the person or an associate for a period or periods aggregating more than six months in any 12-month period;
  • A person considered as an agent other than an independent agent, acting on behalf of another person (principal) if the first-mentioned person:
    • regularly negotiates contracts on behalf of the principal; or
    • habitually maintains a trading stock from which it regularly delivers trading stock on behalf of the principal.
  • Substantial equipment used for more than six months within a 12-month period or installed by, for, or under contract with the person;
  • Activity undertaken, including the operation of substantial equipment, for exploration or exploitation of natural resources or standing timber for a period or periods exceeding in the aggregate 90 days in any 12-month period, for or under contract with a person.