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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 purpose of this Convention the term "permanent establishment" shall mean a fixed place of business through which the business of an enterprise is wholly or partially carried out.

The term "permanent establishment" shall include, in particular:

  • (a) a workplace for the management;
  • (b) a branch;
  • (c) sale outlets;
  • (d) an office;
  • (e) a factory;
  • (f) a workshop;
  • (g) a mine, an oil or gas well, a quarry or any other area used to extract natural resources;
  • (h) a farm or warehouse;
  • (i) a construction location or assembly factory established since more than 6 months.

(2) Notwithstanding the provisions of this paragraph, the term "permanent establishment" shall not include:

  • (a) the use of facilities 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 for the purpose of processing by another enterprise;
  • (c) the maintenance of a stock of goods or merchandise belonging to the enterprise for the purpose of processing by another enterprise;
  • (d) the maintenance of a fixed place of business for the purpose of purchasing goods or merchandise, or collecting information for the enterprise;
  • (e) the maintenance of a fixed place of business for the purpose of carrying out activities of preparatory or auxiliary nature.
  • (f) the maintenance of a fixed place of business for the purpose of carrying out activities abovementioned in sub-paragraphs from (a) to (e) hereof, provided that the overall activity of the fixed place of business resulting from such combination of activities is of a preparatory or auxiliary nature.

(3) Notwithstanding the provisions of paragraph (1) and (2) of this Article, if a person-other than an agent of independent status, to whom paragraph (6) of this Article applies-acts on behalf of an enterprise and has and habitually exercises, in a Contracting State, the authority to conclude contracts on behalf of the enterprise, then that enterprise shall be deemed to have a permanent establishment in that Contracting 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 (3) of this Article, and 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.

(4) Notwithstanding the abovementioned provisions of such article, the insurance enterprise in a Contracting state, other than insurance payback, shall be considered a permanent establishment in the other Contracting state if the enterprise collected the insurance installments or provided insurance services against risks in a region in the other Contracting state through a person other than an agent of independent status, subject to abovementioned paragraph.

(5) 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 independent status, provided that such persons are acting in the ordinary course of their business. If this person carries out, partially or wholly, the activities on behalf of this enterprise, this person may not be considered an independent agent by virtue of this paragraph.

(6) The fact that a company, that is a resident of a Contracting State, controls or is controlled by a company being a resident of the other Contracting State or which carries on business in such other State (through a permanent establishment or otherwise) shall not of itself be sufficient to constitute either company a permanent establishment of the other.