DT6904 - DT: Falkland Islands: double taxation agreement, Article 5: Permanent Establishment

(1) For the purposes of this Arrangement, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

(2) The term "permanent establishment" includes especially:

(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, an oil or gas well, a quarry or any other place of exploration, extraction or exploitation of natural resources; and
(g) an installation or structure used for the exploration or exploitation of natural resources.

(3) A building site, a construction, assembly or installation project or supervisory activities connected therewith constitute a permanent establishment but only where such site, project or activities continue for more than six months.

(4) Notwithstanding the preceding provisions of this Paragraph, the term "permanent establishment" shall be deemed not 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 of collecting information, for the enterprise;
(e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character;
(f) the maintenance of a fixed place of business solely for any combination of activities mentioned in paragraph (a) to (e), of this sub-paragraph, provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

(5) Notwithstanding the provisions of sub-paragraphs (1) and (2) of this Paragraph, where a person, other than an agent of an independent status to whom sub-paragraph (6) of this Paragraph applies, is acting on behalf of an enterprise, and has, and habitually exercises, in a territory an authority to conclude contracts on behalf of the enterprise, that enterprise shall be deemed to have a permanent establishment in that territory in respect of any activities which that person undertakes for the enterprise, unless the activities of such a person are limited to those mentioned in sub-paragraph (4) of this Paragraph which, if exercised through a fixed place of business, would not make that fixed place of business a permanent establishment under the provisions of that sub-paragraph.

(6) An enterprise shall not be deemed to have a permanent establishment in a territory merely because it carries on business in that territory 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.

(7) The fact that a company which is a resident of a territory controls or is controlled by a company which is a resident of the other territory, or which carries on 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.