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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" means a fixed place of business whereby the economic activity of an enterprise is wholly or partly carried on.

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

  • (a) a place of effective 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 where natural resources are extracted.

(3) A building or construction project, installation or assembly or supervisory activities supervision connected with them, provided that such building, construction project or activity lasts for more than six 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, provided that at such facilities, goods and merchandise are not alienated in the Contracting State wherein the facilities are situated;
  • (b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery, provided that at such facilities, goods and merchandise are not alienated in the Contracting State wherein the facilities are situated;
  • (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 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 the purpose of carrying on any combination of activities mentioned in sub-paragraphs (a) to (e) of this Article, provided that the overall activity of the fixed place of business resulting from this combination of activities is of a preparatory or auxiliary nature, not involving the alienation of goods or merchandise.

(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 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 a 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. However, if the activities of such agents are performed exclusively, or almost exclusively, on behalf of the aforementioned enterprise, and the conditions accepted or imposed between that enterprise and the agent in their commercial or financial relations, differ from those which would be made between independent enterprises, then this agent shall not be deemed an agent of an independent status in accordance with the provisions of this paragraph.

(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 economic activities in that other State (whether through a permanent establishment or otherwise), shall not of itself be sufficient to constitute either company a permanent establishment of the other.