Common use of Profits of a Permanent Establishment Clause in Contracts

Profits of a Permanent Establishment. 1. Profits derived in a Contracting State by a resident of the other Contracting State shall be liable to taxation in the first-mentioned State only if they are derived through a permanent establishment located therein and only to the extent which is attributable to the activity of such permanent establishment. 2. In the determination of the profits of a permanent establishment there shall be deducted expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses, whether incurred in the country of residence or abroad. 3. For the purposes of this Convention the term "a permanent establishment" means an agency, an office or any other fixed place of business through which a resident of a Contracting State carries on business in the other Contracting State. 4. Notwithstanding the provisions of paragraphs 1 and 3 the following kinds of activity shall not be deemed as being carried on through a permanent establishment: 5. Construction and assembly works performed during a period of time not exceeding twelve months, including the performance of control over the construction of an object or of any assembly works. In cases where such works are performed in accordance with the programmes of intergovernmental co-operation, the competent authorities of the Contracting States may, by mutual agreement extend the twelve-month period in cases when they deem it necessary; a. purchase and maintenance of goods and merchandise, including the performance of storage operations, and delivery of goods and merchandise; b. conclusion of contracts through an agent or any other authorised person acting as a trustee or on any other written authorization if such activity is beyond the ordinary course of his business; c. display of goods and merchandise, exhibition of exhibits as well as operations connected with their sale after the exposition; d. advertising, collecting and disseminating information, marketing and other similar activity of a preparatory or an auxiliary character; e. performance of planning, development and scientific research works (including joint works), engineering, testing of samples of goods, machines and equipment, technical servicing of machines and equipment, if this servicing is of a preparatory or an auxiliary character to the main activity of a person; f. performance of several functions listed above, provided that this activity in the whole is of a preparatory or an auxiliary character to the main activity of a person; g. Performance of other types of activity of a preparatory or an auxiliary character to the main activity of a person. h. A resident of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State by mere reason that he carries on business in that other State through a broker, commission agent or any other agent of an independent status, provided such persons are acting in the ordinary course of their business. 6. For the purposes of this Convention the fact that a resident of a Contracting State controls or is controlled by a resident of the other Contracting State shall not of itself be considered to be a reason for treating one of them as a permanent establishment of the other. 7. The provisions of this Article shall not affect exemption from taxation provided for by the other articles of this Convention.

Profits of a Permanent Establishment. 1. Profits derived in a Contracting State by a resident of the other Contracting State shall be liable to taxation in the first-mentioned State only if they are derived through a permanent establishment located therein and only to the extent which is attributable to the activity of such permanent establishment. 2. In the determination of the profits of a permanent establishment there shall be deducted expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses, whether incurred in the country of residence or abroad. 3. For the purposes of this Convention the term "“a permanent establishment" ” means an agency, an office or any other fixed place of business through which a resident of a Contracting State carries on business in the other Contracting State. 4. Notwithstanding the provisions of paragraphs 1 and 3 the following kinds of activity shall not be deemed as being carried on through a permanent establishment: 5. Construction (a) construction and assembly works performed during a period of time not exceeding twelve months, including the performance of control over the construction of an object or of any assembly works. In cases where such works are performed in accordance with the programmes of intergovernmental co-operation, the competent authorities of the Contracting States may, by mutual agreement extend the twelve-month period in cases when they deem it necessary;in a. (b) purchase and maintenance of goods and merchandise, including the performance of storage operations, and delivery of goods and merchandise; b. (c) conclusion of contracts through an agent or any other authorised person acting as a trustee or on any other written authorization if such activity is beyond the ordinary course of his business; c. (d) display of goods and merchandise, exhibition of exhibits as well as operations connected with their sale after the exposition; d. (e) advertising, collecting and disseminating information, marketing and other similar activity of a preparatory or an auxiliary character; e. (f) performance of planning, development and scientific research works (including joint works), engineering, testing of samples of goods, machines and equipment, technical servicing of machines and equipment, if this servicing is of a preparatory or an auxiliary character to the main activity of a person; f. (g) performance of several functions listed above, provided that this activity in the whole is of a preparatory or an auxiliary character to the main activity of a person; g. Performance (h) performance of other types of activity of a preparatory or an auxiliary character to the main activity of a person. h. 5. A resident of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State by mere reason that he carries on business in that other State through a broker, commission agent or any other agent of an independent status, provided such persons are acting in the ordinary course of their business. 6. For the purposes of this Convention the fact that a resident of a Contracting State controls or is controlled by a resident of the other Contracting State shall not of itself be considered to be a reason for treating one of them as a permanent establishment of the other. 7. The provisions of this Article shall not affect exemption from taxation provided for by the other articles of this Convention.

Profits of a Permanent Establishment. 1. Profits derived in a Contracting State by a resident of the other Contracting State shall be liable to taxation in the first-mentioned State only if they are derived through a permanent establishment located therein and only to the extent which is attributable to the activity of such permanent establishment. 2. In the determination of the profits of a permanent establishment there shall be deducted expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses, whether incurred in the country of residence or abroad. 3. For the purposes of this Convention the term "a permanent establishment" means an agency, an office or any other fixed place of business through which a resident of a Contracting State carries on business in the other Contracting State. 4. Notwithstanding the provisions of paragraphs 1 and 3 the following kinds of activity shall not be deemed as being carried on through a permanent establishment: 5. Construction (a) construction and assembly works performed during a period of time not exceeding twelve months, including the performance of control over the construction of an object or of any assembly works. In cases where such works are performed in accordance with the programmes of intergovernmental co-operation, the competent authorities of the Contracting States may, by mutual agreement extend the twelve-month period in cases when they deem it necessary; a. (b) purchase and maintenance of goods and merchandise, including the performance of storage operations, and delivery of goods and merchandise; b. (c) conclusion of contracts through an agent or any other authorised person acting as a trustee or on any other written authorization if such activity is beyond the ordinary course of his business; c. (d) display of goods and merchandise, exhibition of exhibits as well as operations connected with their sale after the exposition; d. (e) advertising, collecting and disseminating information, marketing and other similar activity of a preparatory or an auxiliary character; e. (f) performance of planning, development and scientific research works (including joint works), engineering, testing of samples of goods, machines and equipment, technical servicing of machines and equipment, if this servicing is of a preparatory or an auxiliary character to the main activity of a person; f. (g) performance of several functions listed above, provided that this activity in the whole is of a preparatory or an auxiliary character to the main activity of a person; g. Performance (h) performance of other types of activity of a preparatory or an auxiliary character to the main activity of a person. h. 5. A resident of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State by mere reason that he carries on business in that other State through a broker, commission agent or any other agent of an independent status, provided such persons are acting in the ordinary course of their business. 6. For the purposes of this Convention the fact that a resident of a Contracting State controls or is controlled by a resident of the other Contracting State shall not of itself be considered to be a reason for treating one of them as a permanent establishment of the other. 7. The provisions of this Article shall not affect exemption from taxation provided for by the other articles of this Convention.

Profits of a Permanent Establishment. 1. Profits derived in a Contracting State by a resident of the other Contracting State shall be liable to taxation in the first-mentioned State only if they are derived through a permanent establishment located therein and only to the extent which is attributable to the activity of such permanent establishment. 2. In the determination of the profits of a permanent establishment there shall be deducted expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses, whether incurred in the country of residence or abroad. 3. For the purposes of this Convention the term "a permanent establishment" means an agency, an office or any other fixed place of business through which a resident of a Contracting State carries on business in the other Contracting State. 4. Notwithstanding the provisions of paragraphs 1 and 3 the following kinds of activity shall not be deemed as being carried on through a permanent establishment: 5. a. Construction and assembly works performed during a period of time not exceeding twelve months, including the performance of control over the construction of an object or of any assembly works. In cases where such works are performed in accordance with the programmes of intergovernmental co-operation, the competent authorities of the Contracting States may, by mutual agreement extend the twelve-twelve- month period in cases when they deem it necessary; a. b. purchase and maintenance of goods and merchandise, including the performance of storage operations, and delivery of goods and merchandise; b. c. conclusion of contracts through an agent or any other authorised person acting as a trustee or on any other written authorization if such activity is beyond the ordinary course of his business; c. d. display of goods and merchandise, exhibition of exhibits as well as operations connected with their sale after the exposition; d. e. advertising, collecting and disseminating information, marketing and other similar activity of a preparatory or an auxiliary character; e. f. performance of planning, development and scientific research works (including joint works), engineering, testing of samples of goods, machines and equipment, technical servicing of machines and equipment, if this servicing is of a preparatory or an auxiliary character to the main activity of a person; f. g. performance of several functions listed above, provided that this activity in the whole is of a preparatory or an auxiliary character to the main activity of a person; g. h. Performance of other types of activity of a preparatory or an auxiliary character to the main activity of a person. h. 5. A resident of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State by mere reason that he carries on business in that other State through a broker, commission agent or any other agent of an independent status, provided such persons are acting in the ordinary course of their business. 6. For the purposes of this Convention the fact that a resident of a Contracting State controls or is controlled by a resident of the other Contracting State shall not of itself be considered to be a reason for treating one of them as a permanent establishment of the other. 7. The provisions of this Article shall not affect exemption from taxation provided for by the other articles of this Convention.

Profits of a Permanent Establishment. Compare OECD Article 1. Profits derived in a Contracting State by a resident of the other Contracting State shall be liable to taxation in the first-mentioned State only if they are derived through a permanent establishment located therein and only to the extent which is attributable to the activity of such permanent establishment. 2. In the determination of the profits of a permanent establishment there shall be deducted expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses, whether incurred in the country of residence or abroad. 3. For the purposes of this Convention the term "“a permanent establishment" ” means an agency, an office or any other fixed place of business through which a resident of a Contracting State carries on business in the other Contracting State. 4. Notwithstanding the provisions of paragraphs 1 and 3 the following kinds of activity shall not be deemed as being carried on through a permanent establishment: 5. Construction (a) construction and assembly works performed during a period of time not exceeding twelve months, including the performance of control over the construction of an object or of any assembly works. In cases where such works are performed in accordance with the programmes of intergovernmental co-operation, the competent authorities of the Contracting States may, by mutual agreement extend the twelve-twelve- month period in cases when they deem it necessary; a. (b) purchase and maintenance of goods and merchandise, including the performance of storage operations, and delivery of goods and merchandise; b. (c) conclusion of contracts through an agent or any other authorised person acting as a trustee or on any other written authorization if such activity is beyond the ordinary course of his business; c. (d) display of goods and merchandise, exhibition of exhibits as well as operations connected with their sale after the exposition; d. (e) advertising, collecting and disseminating information, marketing and other similar activity of a preparatory or an auxiliary character; e. (f) performance of planning, development and scientific research works (including joint works), engineering, testing of samples of goods, machines and equipment, technical servicing of machines and equipment, if this servicing is of a preparatory or an auxiliary character to the main activity of a person; f. (g) performance of several functions listed above, provided that this activity in the whole is of a preparatory or an auxiliary character to the main activity of a person; g. Performance (h) performance of other types of activity of a preparatory or an auxiliary character to the main activity of a person. h. 5. A resident of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State by mere reason that he carries on business in that other State through a broker, commission agent or any other agent of an independent status, provided such persons are acting in the ordinary course of their business. 6. For the purposes of this Convention the fact that a resident of a Contracting State controls or is controlled by a resident of the other Contracting State shall not of itself be considered to be a reason for treating one of them as a permanent establishment of the other. 7. The provisions of this Article shall not affect exemption from taxation provided for by the other articles of this Convention.