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Untd A Emirates - Iraq Tax Treaty (2017, not yet in force) — Orbitax Tax Hub

Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.

ARTICLE 6

Permanent Establishment

(1) For the purposes of this Convention, the term "permanent establishment" shall mean the fixed place of business through which the enterprise, wholly or in part, is being operated.

(2) The term "permanent establishment" shall, in particular, include:

  • (a) a workplace for the management;
  • (b) a branch;
  • (c) an office;
  • (d) a factory;
  • (e) a workshop;
  • (f) a construction or installation location and any other area used for the exploration of natural resources;
  • (g) a mine, a quarry, or any other area used to extract natural resources.
  • (h) a farm or field

(3) The term "permanent establishment" shall also include:

  • (a) A building or construction site, an assembly or installation project, supervisory actions related thereto, provided that such site, project or business shall be operated for a period that exceeds 6 months during a 12-month period.
  • (b) Providing services, including consultancy services, by an enterprise of a Contracting State through employees or other personnel engaged by the enterprise for this purpose provided that such type of business, for the enterprise itself or an enterprise related thereto, in the Contracting State shall be lasting for a period or periods that exceed 6 months during a 12-month period.  

(4) Notwithstanding the previous provisions stipulated in this Article, the term “permanent establishment” shall not include:

  • (a) The use of facilities only for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;
  • (b) The maintenance of a stock of goods or merchandise belonging to the enterprise for the purpose of storage or display only;
  • (c) The maintenance of a stock of goods or merchandise belonging to the enterprise for the purpose of processing by another enterprise;
  • (d) The maintenance of a fixed place of business for the purpose of purchasing goods or merchandise, or collecting information for the enterprise;
  • (e) The maintenance of a fixed place of business for the purpose of carrying out activities of preparatory or auxiliary nature.
  • (f) The maintenance of a fixed place of business for the purpose of for any combination of the previous activities mentioned in sub-paragraphs (a) to (c), provided that the output of the total activities of fixed place of business is of a preparatory or auxiliary nature.

(5) Notwithstanding the provisions of paragraphs (1) and (2) when a person carries out his business in a Contracting State on behalf of an enterprise of the other Contracting State-other than an independent agent to whom paragraph (7) applies-such enterprise shall be deemed a permanent establishment in the Contracting State firstly mentioned, taking into account the type of activities that this person carries out for the benefit of the establishment, if this person:

  • (a) exercised and exercises the authority to make contracts for the enterprise in that State, unless the activities of that person are limited to the activities mentioned in paragraph (4) (which, if exercised from a fixed place of business, shall not make that fixed place of business a permanent establishment under the provisions of this paragraph;
  • (b) he does not have the aforementioned authority, but he normally maintains in the first-mentioned state a stock of goods and merchandise from which he delivers on behalf of the enterprise.

(6) An enterprise in one of the Contracting States shall not be deemed to have a permanent establishment in the other Contracting State merely as that enterprise carries out business in that other State through a broker, general commission agent, or any other independent agent-provided that such broker or agent is acting in the ordinary course of their business.  

(7) Notwithstanding the provisions of Article 6 herein, if an insurance project of a Contracting State, with the exception of what is related to reinsurance, collects insurance premiums and provides insurance coverage against risks in the other Contracting State, through a person other than an independent agent who does not fall under the concept of agent, shall be considered a permanent establishment in the other Contracting State.

(8) If a company, which is located in one of the Contracting States, controls or is controlled by another company which is located in the other Contracting State, or carries out business in that other State-whether through a permanent establishment or otherwise-both companies shall not be deemed a permanent establishment.