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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" 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 the following:

  • (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) premises used as sales offices.

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

  • (a) a site for construction or building project or a site for installation or assembly or a site for supervisory activities related thereto where such site, project or activities last for more than six months;
  • (b) the provision of services, including consultancy services by an enterprise acting through employees engaged by the enterprise for this purpose but only where activities of that nature continue for a period or periods aggregating more than six months within any period of 12 months.

(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 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 maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of 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 character;
  • (f) the maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs (a) through (e), 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 (6) of this Article shall apply acting on behalf of an enterprise situated in the other Contracting State where such person habitually exercises 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 this paragraph.

(6) An enterprise shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business therein 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, where the activities of such an agent are carried out exclusively or almost exclusively on behalf of that enterprise, such person shall not be considered an independent agent within the meaning 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 business therein (whether through a permanent establishment or otherwise), shall not of itself suffice to constitute either company a permanent establishment of the other.