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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 expression "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

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

  • (a) places of management;
  • (b) branch offices;
  • (c) offices;
  • (d) factories;
  • (e) workshops, sales warehouses;
  • (f) mines, oil or gas wells, quarries or any other place related to the extraction of natural resources;
  • (g) construction or assembly sites whose duration exceeds six months.

(3) The expression "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, always provided this does not constitute a sale;
  • (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 transformation or processing by another enterprise;
  • (d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or 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 nature.

(4) 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 State the authority to conclude contracts in the name 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 not limited to purchasing merchandise on behalf of 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 State through a broker, a general commission agent or any other agent of independent status, provided that such persons are acting within the ordinary course of their business.

However, if the independent agent whose help is used for carrying out a business, has a stock of goods which is regularly used for shipping sold items, such stock shall be deemed as a "permanent establishment" of the enterprise.

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