Permanent establishment rules clarify when fixed place or agent activities create taxable presence for foreign enterprises.

Permanent establishment is a fixed place of business in which an enterprise's business is wholly or partly carried on and includes places such as a place of management, branch, office, factory, warehouse, extraction sites, and building sites or construction projects that continue beyond six months. Dependent agents who habitually negotiate contracts, maintain delivery stock, or secure orders predominantly for the enterprise create a permanent establishment, while independent agents acting in the ordinary course do not. Exclusions cover solely storage or preparatory/auxiliary activities and control between related resident companies does not by itself create a permanent establishment. Entertainers and athletes performing in the other State also create a permanent establishment unless substantially publicly funded.

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