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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 5

Permanent Establishment

(1) For the purposes of this Convention, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

(2) The term "permanent establishment" includes especially:

  • (a) a place of management;
  • (b) a branch;
  • (c) an office;
  • (d) a factory;
  • (e) a workshop;
  • (f) a farm or plantation;
  • (g) a mine, an oil or gas well, a stone quarry or any other place of exploration, exploitation or extraction of natural resources.

(3) The term "permanent establishment" includes in particular:

  • (a) a building site, a construction or assembly project or supervisory activities connected with them, but only where such site, project or activity continues for a period exceeding in the aggregate nine months in any twelve-month period;
  • (b) the rendering of services including consultancy services by an enterprise of a Contracting State through employees or other personnel in the other Contracting State, provided that such activities continue for the same project or a connected project for a period exceeding in the aggregate nine months in any twelve-month period.

(4) Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include:

  • (a) the use of facilities solely 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 solely for the purpose of storage or display or delivery;
  • (c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;
  • (d) the maintenance of a stock of goods or merchandise belonging to the enterprise, to be exhibited at a trade fair or exhibition and sold by the enterprise at the conclusion of the fair or exhibition;
  • (e) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise;
  • (f) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary nature;
  • (g) the maintenance of a fixed place of business solely for the purpose of carrying on any combination of activities mentioned in sub-paragraphs (a) to (f), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary nature.

(5) Notwithstanding the provisions of paragraphs (1) and (2) of this Article, where a person who is an agent of independent status to whom paragraph (7) applies acts on behalf of an enterprise and has, and habitually exercises, in a Contracting State, an authority to conclude contracts on behalf of the enterprise, then that enterprise shall be deemed to have a  permanent establishment in that Contracting State in respect of any activities which that  person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph (4), and which if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph.

(6) Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State, except in the case of re-insurance, shall be deemed to have a permanent establishment in the other Contracting State if it collects premiums or insures risks in that other State through a person other than an agent of independent status where the provisions of paragraph (7) of this Article apply.

(7) An enterprise shall not be deemed to have a permanent establishment in a State merely because it carries on business in that State through a broker, a general commission agent or any other agent of independent status, provided that such persons are acting in the ordinary course of their business.

(8) The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself be sufficient to constitute either company a permanent establishment of the other.