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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 the 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) warehouse;
  • (g) premises for receiving or soliciting orders;
  • (h) permanent sales exhibition;
  • (i) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources;
  • (j) farm or plantation;
  • (k) a building site or construction or assembly project, but only where such site or project continues for a period or periods of more than six months in any twelve-month period.

(3) 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 or display 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;
  • (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 fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;
  • (e) 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 character.
  • (f) The sale of goods or merchandise belonging to the enterprise displayed in the frame of an occasional and temporary fair or exhibition after the closing of the said fair or exhibition; provided that the enterprises concerned fulfill all the legal requirements and formalities for disposal of their property in either Contracting States.

(4) Notwithstanding the provisions of paragraph (1) and (2), where a person-other than an agent of independent status to whom paragraph (5) applies-is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts on behalf of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activity which that person undertakes for the enterprise, unless the activities of such person are limited to the purchase of goods or merchandise for the enterprise.

(5) An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status provided that such persons are acting in the ordinary course of their business. However when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he will not be considered an agent of an independent status within the meaning of this paragraph.

(6) 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 Contracting State (whether through a permanent establishment or otherwise), shall not of itself constitutes either company a permanent establishment of the other.