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TMI BlogArticle 5 - Permanent EstablishmentX X X X Extracts X X X X X X X X Extracts X X X X ..... manent 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 good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place, or by the same enterprise or closely related enterprises at the two places, is not 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 modif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ending in the fiscal year concerned. In the absence of a service PE reference in OECD Model, the presence has to be ascertained through general principles under article 5(1). As per para 5(b) of Article 5 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 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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