Permanent establishment rules define when a fixed place or dependent agent creates taxable presence under the treaty. Article 5 defines Permanent Establishment as a fixed place of business and lists examples including management, branch, office, factory, workshop, sales ... Summary
Permanent establishment rules define when a fixed place or dependent agent creates taxable presence under the treaty.
Article 5 defines Permanent Establishment as a fixed place of business and lists examples including management, branch, office, factory, workshop, sales outlet, warehouses providing storage for others, agricultural and extraction sites. It treats prolonged building sites, construction/installation projects and prolonged furnishing of services through personnel as permanent establishments. Exclusions cover preparatory or auxiliary activities such as mere storage, display, processing by another, purchasing, or information collection. Dependent agents with authority to conclude contracts, maintaining stock for delivery, or habitually securing orders create a permanent establishment, while independent agents acting in the ordinary course of business do not.
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