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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" refers to a fixed place of business through which the business of an enterprise is wholly or partly carried on.

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

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

(3) A construction or assembly site or a site for supervisory activities carried out therein only shall only be deemed a permanent establishment if its duration exceeds six 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 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 of collecting information, for the enterprise;
  • (e) The maintenance of a fixed place of business solely for the purpose of carrying on other activities of a preparatory or auxiliary nature for the enterprise;
  • (f) The maintenance of a fixed place of business solely for the purpose of carrying on 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 an independent status to whom paragraph (6) of this Article applies-acts on behalf of an enterprise, and has, and habitually exercises, in a Contracting 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 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) 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, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business.

(7) 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 itself be sufficient to constitute either company a permanent establishment of the other.