Permanent establishment definition creates taxable nexus for enterprise through fixed place, agency or insurance activities.

A permanent establishment is a fixed place of business through which an enterprise conducts business, including specified examples and construction projects exceeding twelve months. Excluded are places used solely for preparatory or auxiliary activities (storage, display, occasional delivery, purchasing, information gathering, advertising or similar combined activities). Agency rules deem an enterprise to have a permanent establishment where a person habitually concludes contracts on its behalf or maintains stock for regular delivery; independent agents acting in the ordinary course do not create such nexus unless devoted almost wholly to the enterprise. Insurance companies collecting premiums or insuring risks through non-independent agents also create a permanent establishment. Control between related companies alone is insufficient to establish a permanent establishment.

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