Article 5 - Permanent Establishment

Permanent establishment rules determine when an enterprise's activities or agent create taxable presence under a tax treaty.

Permanent establishment defines when an enterprise is treated as carrying on business through a fixed place of business in a Contracting State. It includes places such as management offices, branches, factories, warehouses and installations for natural resources, and applies time based rules for construction sites, supervisory activities, services provided through personnel, and agents who can conclude contracts or maintain stock. Independent agents acting in the ordinary course of business generally do not create a permanent establishment, while preparatory or auxiliary activities are excluded unless another fixed place exists.