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 or corporation is wholly or partially carried on.

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

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

(3) The term "permanent establishment" shall also apply to a construction site or assembly site, as well as any management activities exercised therein but only where such a project have a duration exceeding twelve-months.

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

• (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, display, or delivery;
• (c) the maintenance of stock of goods or merchandise belonging to the enterprise solely for the purpose of processing or working by another enterprise;
• (d) the maintenance of fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information for the enterprise;
• (e) the maintenance of fixed place of business solely for the purpose of carrying on, for the enterprise any activities of a preparatory or auxiliary nature;
• (f) the use of fixed place of business solely for carrying out any combination of activities mentioned in sub-paragraphs (a) through (e), 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-other than an agent of independent status to whom paragraph (7) of this Article applies-acts on behalf of an enterprise of the other Contracting State and has and habitually exercises, in that State the authority to enter into contracts on behalf of the enterprise, then that enterprise shall be deemed to have a permanent establishment in that 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) of this Article, 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 independent agent to whom the provision of paragraph (7) of this Article apply.

(7) An enterprise shall not be deemed to have a permanent establishment in a Contracting 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 act 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.