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HMRC internal manual

Double Taxation Relief Manual

From
HM Revenue & Customs
Updated
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DT: Tunisia: double taxation agreement, Article 5: Permanent Establishment

(1) For the purposes of this Convention, the term `permanent establishment` means afixed place of business in which the business of the enterprise is wholly or partlycarried on, whether directly or through a participation in a joint venture (association enparticipation) or a partnership (societe de fait).

(2) The term `permanent establishment` shall include 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 extraction of natural resources;
(g) an installation or structure used for the exploration of natural resources;
(h) a building site or construction or assembly project or supervisory activities in connection therewith, where such site, project or activity continues for a period of more than six months, or where such project or activity, being incidental to the sale of machinery or equipment, continues for a period not exceeding six months and the charges payable for the project or activity exceed 10 per cent of the sale price of the machinery or equipment.

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

(4) A person acting in a Contracting State on behalf of an enterprise of the otherContracting State–other than an agent of an independent status to whom the provisions ofparagraph (6) of this Article apply–shall be deemed to be a permanent establishment inthe first-mentioned State if he has, and habitually exercises in that State, an authorityto conclude contracts in the name of the enterprise, unless his activities are limited tothe purchase of merchandise for the enterprise.

(5) An insurance enterprise of a Contracting State shall, except with regard toreinsurance, be deemed to have a permanent establishment in the other Contracting State ifit collects premiums in the territory of that other State or insures risks situatedtherein through an employee or representative established therein who is not an agent ofan independent status within the meaning of paragraph (6) of this Article.

(6) An enterprise of a Contracting State shall not be deemed to have a permanentestablishment in the other Contracting State merely because it carries on business in thatother State through a broker, general commission agent or any other agent of anindependent status, provided that such persons are acting in the ordinary course of theirbusiness.

(7) The fact that a company which is a resident of a Contracting State controls or iscontrolled by a company which is a resident of the other Contracting State, or whichcarries on business in that other State (whether through a permanent establishment orotherwise), shall not of itself constitute either company a permanent establishment of theother.