Gas and electricity: Meaning of “establishment”
The business establishment is the principal place of business and is usually the head office, headquarters or “seat” from which the business is run. There can be only one such place which may be an office, showroom or factory.
A fixed establishment is an establishment other than the business establishment, to which the natural gas and electricity is supplied in the commercial sense, rather than being physically delivered there. A business may have several fixed establishments.
If the customer has establishments in more than one country, each supply of natural gas or electricity takes place where the establishment most directly connected with that particular supply is located.
In deciding which establishment is most directly connected account should be taken of where
- the supply is effectively used or enjoyed (again in a commercial rather than physical sense)
- any address on contracts, correspondence and invoices is located
- the directors or others who enter into the contract are permanently based, and
- decisions are taken and controls are exercised over the performance of the contracts.
However, if an establishment is physically receiving the supply of natural gas or electricity, it is normally that establishment which is most directly connected with the supply, even if the contractual position is different.