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CHAPTER 1 - General Provisions
CHAPTER 2 - Taxation of Income
CHAPTER 3 - Inheritance Tax
CHAPTER 4 - Registration Fees Other than Inheritance Tax-Stamp Duty
CHAPTER 5 - Administrative Assistance
CHAPTER 6 - Special Provisions
CHAPTER 7 - Transitional Provisions
CHAPTER 8 - Final Provisions
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 4

Permanent Establishment

(1) For the purposes of this Regulation, 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 in particular:

  • (a) a place of management;
  • (b) a branch;
  • (c) an office;
  • (d) a factory;
  • (e) a workshop;
  • (f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources;
  • (g) a building site or assembly site or a site for supervisory activities in connection therewith, where such site or activities continue for a period exceeding six months.

(3) The term "permanent establishment" shall be deemed not to include the following:

  • (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 use of a fixed place of business solely for the purpose of advertising;
  • (e) the use 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 use of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character .

(4) A person acting in a Member State on behalf of an enterprise of another Member State, other than an agent of an independent status referred to in paragraph (7) hereinafter, shall be considered as a "permanent establishment" in the first mentioned State:

  • (a) if he has, and habitually exercises, in that State a general authority permitting him to negotiate and conclude contracts in the name of or on behalf of the enterprise;
  • (b) he habitually maintains in the first-mentioned State a stock of merchandise from which he regularly delivers goods for delivery in the name of or on behalf of the enterprise.

(5) An insurance agency or reinsurance agency of a Member State is considered to have a permanent establishment in another Member State if it collects premiums in the territory of that State or insures risks that are covered therein through an employee or through a representative who does not fall within the class of persons referred to in paragraph (7) below.

(6) An enterprise shall not be deemed to have a permanent establishment in a Member State merely because of the purchase of goods on behalf of the enterprise.

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

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