ARTICLE 5 — U.S. Income Tax Treaty

Permanent Establishment

For the purposes of this Convention, except as otherwise specified in this Article, the term “permanent establishment” means a regular place of business through which the business of an enterprise is wholly or partly carried on.
The term ''permanent establishment" shall include especially:

a) a place of management; b) a branch; c) an office; d) a factory; e) a workshop; f) a store or premises used as a sales outlet; g) a warehouse, in relation to a person providing storage facilities for others; h) a mine, an oil or gas well, a quarry, or any other place of extraction of natural resources;

i) a building site or construction, assembly or installation, or drilling rig or ship used for the exploration or development of natural resources within a Contracting State, but only if such site, or activity continues within the State for a period or periods aggregating more than 183 days in any twelve-month period (including the period of any supervisory activity connected therewith), provided that a permanent establishment shall not exist in any taxable year in which such site or activity continues within that State for a period or periods aggregating less than 30 days in that taxable year;

j) a dredging project within a Contracting State, but only where such project continues within the State for a period or periods aggregating more than 120 days in any twelve-month period (including the period of any supervisory activity connected therewith), provided that a permanent establishment shall not exist in any taxable year in which such site, project or activity continues within that State for a period or periods aggregating less than 30 days in that taxable year;

k) the furnishing of services, including consultancy, management, technical and supervisory services, within a Contracting State by an enterprise through employees or other persons, but only if

(i) activities of that nature continue within the State for a period or periods aggregating more than 90 days in a twelve-month period, provided that a permanent establishment shall not exist in any taxable year in which such services are rendered in that State for a period or periods aggregating less than 30 days in the taxable year; or

(ii) the services are performed within the State for an associated enterprise (within the meaning of Article 9 (Associated Enterprises)); l) the maintenance of substantial equipment or machinery within a Contracting State but only if such equipment or machinery is maintained within that State for a period of more than 120 consecutive days, provided that a permanent establishment shall not exist in any taxable year in which such equipment or machinery is maintained within that State for a period or periods aggregating less than 30 days in that taxable year.

Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include any one or more of the following:

a) the use of facilities solely for the purpose of storage, display, or delivery of goods or merchandise belonging to the enterprise, other than goods or merchandise held for sale by such enterprise in a store or premises used as a sales outlet;

b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery, other than goods or merchandise held for sale by such enterprise in a store or premises used as a sales outlet;

c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

d) the maintenance of a regular place of business solely for the purpose of purchasing goods or merchandise, or of collecting information, for the enterprise;

e) the maintenance of a regular place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise.

If an enterprise of a Contracting State does not have a permanent establishment in the other Contracting State under paragraphs 1, 2, and 3, but goods and merchandise are either:

a) subjected to processing in that other Contracting State by another person (whether or not purchased in that other Contracting State); or

b) purchased in that other Contracting State (and such goods or merchandise are not subjected to processing outside that other Contracting State.) then such enterprise shall be considered to have a permanent establishment in that other Contracting State to the extent that all or part of such goods or merchandise is sold by or on behalf of such enterprise for use, consumption, or disposition in that other Contracting State.

Notwithstanding the provisions of paragraphs 1 and 2, a person (other than an agent of an independent status to whom paragraph 6 applies) acting in a Contracting State on behalf of an enterprise of the other Contracting State shall be deemed to be a permanent establishment of that enterprise in the first-mentioned State if:

a) he has and habitually exercises in the first-mentioned State an authority to conclude contracts on behalf of the enterprise, unless his activities are limited to those mentioned in paragraph 3 which, if exercised through a regular place of business, would not make that regular place of business a permanent establishment under the provisions of that paragraph (subject to the provisions of paragraph 4); or

b) he habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise, and additional activities conducted in that State on behalf of the enterprise have contributed to the sale of the goods or merchandise.

An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent, or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such persons are devoted substantially on behalf of that enterprise, he shall not be considered an agent of independent status within the meaning of this paragraph if the transactions between the agent and the enterprise were not made under arm's length conditions.
The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting 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.