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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 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 mine, an oil or gas well, a quarry or any other place of exploration, exploitation or extraction of natural resources;
  • (g) places used as selling points;
  • (h) rendering services, including consultancy services, by an enterprise of a Contracting State through employees or other personnel, provided that such activities continue for a period exceeding in the aggregate six months during any twelve month period;
  • (i) farms of commercial nature;

(3) A project site, construction project, installation, assembly, or supervisory activities connected with them, shall represent a permanent establishment provided that such site, project or activity continues for a period, exceeding in the aggregate six months;

(4) 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;
  • (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 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 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) through (e), provided that the overall activity of the fixed place of business resulting from this combination of activities is of a preparatory or auxiliary nature.

(5) Notwithstanding the provisions of paragraphs (1) and (2) of this Article, where a person other than an agent of independent status to whom paragraph (6) 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 (4), 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.

(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, a general commission agent or any other agent of independent status, provided that such persons act in the ordinary course of their business.

(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 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.

(8) Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State, except in the case of re-insurance, shall be deemed to have a permanent establishment in the other Contracting State, if it collects premiums or insures risks in that other Contracting State through a person other than an agent of independent status.