ARTICLE 9

Definition of Permanent Establishment

For purposes of this Convention

1. The term "permanent establishment" means a fixed place of business through which a resident of one of the Contracting States engages in industrial or commercial activity.

2. The term "a fixed place of business" includes, but is not limited to, a seat of management, an office, a store or other sales outlet; a workshop, a factory, a warehouse, a mine, a quarry, or other place of extraction of natural resources, or a building, construction, or installation project.

3. Notwithstanding paragraphs 1 and 2, a permanent establishment shall not include a fixed place of business used only for one or more of the following activities:

(a) The processing by another person under arrangements or conditions which are or would be made between independent persons, of goods or merchandise belonging to the resident;

(b) The purchase, under arrangements or conditions which are or would be made between independent persons, of goods or merchandise for the account of the resident;

(c) The storage and/or delivery of goods belonging to the resident (other than goods or merchandise held for sale by such resident in a store or other sales outlet)

(d) The collection of information for the resident; (e) Advertising, the conduct of scientific research, the display of goods or merchandise, or the supply of information, if such activities have a preparatory or auxiliary character in the trade or business of the resident;

(f) Construction, assembly, or installation projects if the fixed place of business is used for such purpose for less than 6-months.

4. Even if a resident of one of the Contracting States does not have a permanent establishment in the other Contracting State under paragraphs 1 through 3, nevertheless it shall be deemed to have a permanent establishment in that other Contracting State if it (a) Engages in industrial or commercial activity in that other Contracting State through a person who

(i) Has authority to conclude contracts in the name of that resident and habitually exercises that authority in that other Contracting State, unless the exercise of the authority is limited to the purchase of goods or merchandise for the account of the resident; or

(ii) Maintains in that other Contracting State a stock of goods or merchandise belonging to that resident from which he regularly fills orders or makes deliveries. (b) Maintains equipment or machinery for rental or other purposes within that other Contracting State for a period of 6-months or more; or

(c) Sells in that other Contracting State goods or merchandise which either (i) Were subjected to substantial processing in that Contracting State (whether or not purchased in that Contracting State), or

(ii) Were purchased in that Contracting State and not subjected to substantial processing outside that Contracting State.

5. Notwithstanding paragraph 4, a resident of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it uses the services in that other Contracting State of a bona fide broker, general commission agent, forwarding agent, custodian, or other agent of independent status acting in the ordinary course of its business.

6. The fact that a resident of one of the Contracting States is a related person with respect to

(a) a resident of the other Contracting State or (b) a corporation which engages in industrial or commercial activity in that other Contracting State (whether through a permanent establishment or otherwise) shall not of itself be taken into account in determining whether the first-mentioned resident has a permanent establishment in that other Contracting State.

7. If a resident of one of the Contracting States has a permanent establishment in that other Contracting State at any time during the taxable year, it shall be considered to have a permanent establishment in that other Contracting State for the entire taxable year.