Permanent establishment rules clarify agency, construction and services thresholds, and preparatory exclusions under the tax treaty. Article 5 defines permanent establishment as a fixed place of business and lists typical examples. It establishes a >90 day threshold for construction sites and for services furnished by personnel (aggregating periods within 12 months) to create a permanent establishment. It excludes purely preparatory or auxiliary activities, storage or display, stocks for processing, and purchasing or information-gathering premises. Agency rules deem a permanent establishment where a person habitually has authority to conclude contracts, maintains stock for delivery, or habitually secures orders for the enterprise; independent agents acting in the ordinary course do not create a permanent establishment unless devoted almost wholly to the enterprise. Insurance collection through non-independent agents also creates a permanent establishment.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Permanent establishment rules clarify agency, construction and services thresholds, and preparatory exclusions under the tax treaty.
Article 5 defines permanent establishment as a fixed place of business and lists typical examples. It establishes a >90 day threshold for construction sites and for services furnished by personnel (aggregating periods within 12 months) to create a permanent establishment. It excludes purely preparatory or auxiliary activities, storage or display, stocks for processing, and purchasing or information-gathering premises. Agency rules deem a permanent establishment where a person habitually has authority to conclude contracts, maintains stock for delivery, or habitually secures orders for the enterprise; independent agents acting in the ordinary course do not create a permanent establishment unless devoted almost wholly to the enterprise. Insurance collection through non-independent agents also creates a permanent establishment.
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