TaxTMI 
TaxTMI 
Article 5 - Permanent Establishment
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....Meaning of Permanent Establishment [ Para 1 to 4 of Article 5 ] * The term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on. [ Para 1 ] * includes * a) a place of management; * b) a branch; * c) an office; * d) a factory; * e) a workshop, and * f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources. [ Para 2 ] * g) a building site or construction or installation project constitutes a permanent establishment only if it lasts more than twelve months [ Para 3 ] * Exclude * a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterpris....
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....of a preparatory or auxiliary character, * The business activities carried on by the two enterprises at the same place, or by the same enterprise or closely related enterprises at the two places, constitute complementary functions that are part of a cohesive business operation. [ Para 4.1 ] Acting as Agent other than Independent Agent [ Para 5 of Article 5 ] * where a person is acting in a Contracting State on behalf of an enterprise and, in doing so, habitually concludes contracts, or habitually plays the principal role leading to the conclusion of contracts that are routinely concluded without material modification by the enterprise, and these contracts are * a) in the name of the enterprise, or * b) for the transfer of the owne....
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....State, or * which carries on business in that other State (whether through a permanent establishment or otherwise), * shall not of itself constitute either company a permanent establishment of the other. Meaning of Closely related enterprises [ Para 8 of Article 5 ] * A person or enterprise is closely related to an enterprise if, based on all the relevant facts and circumstances, one has control of the other or both are under the control of the same persons or enterprises. * In any case, a person or enterprise shall be considered to be closely related to an enterprise if one possesses directly or indirectly more than 50 per cent of the beneficial interest in the other (or, in the case of a company, more than 50 per cent of the aggr....
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....of UN Model (b) the person does not habitually conclude contracts nor plays the principal role leading to the conclusion of such contracts, but habitually maintains in that State a stock of goods or merchandise from which that person regularly delivers goods or merchandise on behalf of the enterprise. As per para 6 of Article 5 of UN Model relating to Insurance which is absent in the OECD Model * An insurance enterprise of a Contracting State shall, except in regard to re-insurance, be deemed to have a permanent establishment in the other Contracting State * if it collects premiums in the territory of that other State or insures risks situated therein through a person. * In the absence of similar Article in the OECD Model, * a P....