Permanent establishment rules: fixed place, activity and agent tests define taxable nexus, with MLI anti-fragmentation adjustments. Article 5 defines Permanent Establishment as a fixed place of business and enumerates specific examples, including construction sites which, if activities continue beyond the treaty threshold, constitute a permanent establishment. The MLI splits-up rule aggregates fragmented periods and closely related enterprises' activities to prevent avoidance. Preparatory or auxiliary activity exemptions are set out but the MLI excludes the exemption where combined or complementary activities by the same or a closely related enterprise are not preparatory or auxiliary. Agency and independent-agent tests determine permanent-establishment attribution, and close-relationship is defined by control or substantial beneficial ownership.
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: fixed place, activity and agent tests define taxable nexus, with MLI anti-fragmentation adjustments.
Article 5 defines Permanent Establishment as a fixed place of business and enumerates specific examples, including construction sites which, if activities continue beyond the treaty threshold, constitute a permanent establishment. The MLI splits-up rule aggregates fragmented periods and closely related enterprises' activities to prevent avoidance. Preparatory or auxiliary activity exemptions are set out but the MLI excludes the exemption where combined or complementary activities by the same or a closely related enterprise are not preparatory or auxiliary. Agency and independent-agent tests determine permanent-establishment attribution, and close-relationship is defined by control or substantial beneficial ownership.
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