- 1
- For the purposes of this Agreement, 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 especially:
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- 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.
- 3
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- a)Notwithstanding the provisions of paragraphs 1 and 2, the term "permanent establishment" shall include a building site, a construction, assembly or installation project, as well as supervisory activities in connection therewith, the furnishing of services including consultancy services by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only if these activities continue for a period of more than three months.
- b)However, in the case of installation activities which are incidental to the sale of machinery by an enterprise in the other State, and the installation activities are necessary to complete the sale of that machinery or equipment, then in such a case, such installation shall not constitute a permanent establishment unless it lasts for more than six months.
- 4
- Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall not be deemed to include:
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- 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 character.
- 5
- The term "permanent establishment" shall include a fixed place of business used as a sales outlet notwithstanding the fact that such fixed place of business is otherwise maintained for any of the activities mentioned in paragraph 4 of this Article.
- 6
- An enterprise shall not be deemed to have a permanent establishment in one of the States merely because it carries on business in that State through a broker, general commission agent of any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he will not be considered an agent of an independent status within the meaning of this paragraph.
- 7
- Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent of an independent status to whom paragraph 6 applies - is acting in one of the States on behalf of an enterprise of the other State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned State in respect of any activities which that person undertakes for the enterprise, if such a person:
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- a)has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 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; or
- b)habitually secures orders for the sale of goods or merchandise in the first-mentioned State exclusively or almost exclusively on behalf of the enterprise itself or on behalf of the enterprise and other enterprises controlled by it or which have a controlling interest in it.
- 8
- Subject to the preceding provisions of this Article, the fact that a company which is a resident of one of the States controls or is controlled by a company which is a resident of the other State, or which carries on business in that other State (whether through a permanent establishment or enterprise), shall not of itself constitute either company a permanent establishment of the other.
