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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:

  • (a) a place of management;
  • (b) a branch;
  • (c) an office;
  • (d) a factory;
  • (e) a workshop;
  • (f) a farm or plantation; and
  • (g) a mine, an oil or gas well, a quarry or any other place relating to the exploration or use of natural resources.

(3) The term "permanent establishment" shall also include the following:

  • (a) a construction site or an assembly line or project for supervisory activities in connection therewith, but only if such site, project or activities continue for a period exceeding six months during any period of 12 months and,
  • (b) the provision of services, including consultancy services by an enterprise of a Contracting State acting through employees or other personnel engaged for such purposes in the other Contracting State provided such activities continue, for the same or a connected project for a period or periods aggregating more than six months during any 12 month period.

(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 exhibition of goods or merchandise belonging to the enterprise at a trade fair or an occasional and temporary exhibition, that are sold at the end of this fair or exhibition;
  • (e) the use of a fixed place of business solely for the purpose of purchasing goods or merchandise or for collecting information for the enterprise;
  • (f) 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;
  • (g) the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) through (f) of this paragraph, provided that the overall activity of the fixed place of business resulting from this combination remains of a preparatory or auxiliary character.

(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 (7) of this Article applies-is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to enter into contracts on behalf of the enterprise, 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) Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State shall, except in case of reinsurance, be deemed to have a permanent establishment in the other Contracting State if it collects premiums in the territory of that other State or insures risks covered therein through a person other than an agent of an independent status to whom paragraph (7) of this Article applies.

(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 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 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 suffice to constitute either company a permanent establishment of the other.