ARTICLE 5
Permanent Establishment
(1) For the purposes of this Convention, the term "permanent establishment" means a fixed place of business whereby the activity of an enterprise is wholly or partly performed.
(2) The term "permanent establishment" shall be understood specifically as:
- (a) the places of effective management;
- (b) the subsidiaries;
- (c) the offices;
- (d) the factories;
- (e) the workshops; and
- (f) the mines, the oil or gas wells, the quarries or any other place where natural resources are extracted.
(3) A building site, a construction project, or facilities, shall constitute a permanent establishment, only when these last more than 12 months.
(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 stocks of goods or merchandise belonging to the company solely for the purpose of storage, display or delivery;
- (c) the maintenance of stocks of goods or merchandise belonging to the enterprise solely for the purpose that they be processed 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 that is of a preparatory or auxiliary nature;
- (f) the maintenance of a fixed place of business solely for any combination of activities mentioned in subsections (a) through (e), provided that the overall activity of the fixed place of business resulting from this combination continues to be 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 (6) of this Article shall apply-is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in that Contracting State in respect of the activities that person undertakes for the business, if this person has and habitually exercises in a Contracting State an authority to conclude contracts in the name of 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 of itself be sufficient to constitute either company in a permanent establishment of the other.