Document ID: chunk:federal_register_of_legislation:C2004A01208:schedule:47:p4
Version: federal_register_of_legislation:C2004A01208
Segment Type: schedule
Provision Reference: sch 47 (pt 4/25)
Character Range: 97514–100340

be a resident only of the State in which its place of effective management is situated.

Article 5

PERMANENT ESTABLISHMENT

1 For the purposes of this Agreement, 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:

 (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 extraction of natural resources; and

 (g) an agricultural, pastoral or forestry property.

3 An enterprise shall be deemed to have a permanent establishment in a Contracting State and to carry on business through that permanent establishment if it has a building site or construction or installation project in that State, or a supervisory or consultancy activity connected therewith, which lasts more than 6 months.

4 An enterprise shall be deemed to have a permanent establishment in a Contracting State and to carry on business through that permanent establishment if:

        (a) heavy equipment is being used in that State by, for or under contract with the enterprise; or

        (b) a person manufactures or processes in that State for the enterprise goods or merchandise belonging to the enterprise.

5 An enterprise shall not be deemed to have a permanent establishment merely by reason of:

        (a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; or

        (b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; or

        (c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; or

        (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; or

        (e) the maintenance of a fixed place of business solely for the purpose of advertising, supplying information, or scientific research or for similar activities which have a preparatory or auxiliary character for the enterprise; or

        (f) the maintenance in Mexico of a representative office of a bank where the activities of the representative office are limited by the law of Mexico to activities which are of a preparatory or auxiliary nature.

6 A person acting in a Contracting State on behalf of an enterprise of the other Contracting State—other than an agent of an independent status to whom paragraph 7 applies—shall be deemed to be a permanent establishment of that enterprise in the firstmentioned State if the person has, and habitually exercises in