DT2703 - DT: Australia: old agreement, Article 4: Permanent Establishment

This Agreement applied up to 31st March 2004 for UK Corporation Tax, 5th April 2004 for UK income tax and 30th June 2004 for Australian tax. For later periods the new Agreement applies. This can be accessed via the page Tax Treaties – in force http://www.hmrc.gov.uk/international/in_force.htm.

(4) (1) For the purposes of this Agreement the term 'permanent establishment' means a fixed place of trade or business in which the trade or business of the enterprise is wholly or partly carried on.

(2) The term 'permanent establishment' includes-

(a) a management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, quarry or other place of extraction of natural resources;
(g) an agricultural, pastoral or forestry property;
(h) a building site or a construction, installation or assembly project which exists for more than six months.

(3) The term 'permanent establishment' shall not be deemed to include-

(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;
(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;
(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 fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;
(e) the maintenance of a fixed place of business solely for the purpose of activities which have a preparatory or auxiliary character for the enterprise, such as advertising or scientific research.

(4) An enterprise of one of the territories shall be deemed to have a permanent establishment in the other territory if it carries on supervisory activities in that other territory for more than six months in connection with a building site, or a construction, installation or assembly project which is being undertaken, in that other territory.

(5) A person acting in one of the territories on behalf of an enterprise of the other territory (other than an agent of independent status to whom paragraph (6) of this Article applies) shall be deemed to be a permanent establishment of that enterprise in the first- mentioned territory-

(a) if he has, and habitually exercises in that first-mentioned territory, an authority to conclude contracts on behalf of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise; or

(b) if he habitually fills orders from a stock of goods or merchandise maintained in that first-mentioned territory; or

(c) if in so acting he manufactures or processes in that first-mentioned territory any goods for the enterprise.

(6) An enterprise of one of the territories shall not be deemed to have a permanent establishment in the other territory merely because it carries on trade or business in that other territory through a broker, a general commission agent or any other agent of independent status, where such a person is acting in the ordinary course of his business as a broker, a general commission agent or other agent of independent status.

(7) The fact that a company which is a resident of one of the territories controls or is controlled by a company which is a resident of the other territory, or which carries on trade or business in that other territory whether through a permanent establishment or otherwise, shall not of itself constitute either company a permanent establishment of the other.

(8) Where an enterprise of one of the territories sells to a person in the other territory goods manufactured, assembled, processed, packed or distributed in the other territory by an industrial or commercial enterprise for, or at, or to the order of, that first-mentioned enterprise and-

(a) either enterprise participates directly or indirectly in the management, control or capital of the other enterprise; or

(b) the same persons participate directly or indirectly in the management, control or capital of both enterprises, then for the purposes of this Agreement that first- mentioned enterprise shall be deemed to have a permanent establishment in the other territory and to carry on trade or business in the other territory through that permanent establishment.