Bangladesh - Permanent establishment

Article 5. Permanent establishment

Definition permanent establishment (lid 1 en 2)

1.  For the purposes of this Convention, 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 warehouse in relation to a person providing storage facilities for others; and

g a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.

Representative office (3)

3.  A building site, a construction, assembly or installation project constitutes a permanent establishment only if it lasts more than six months.

Building site/ project (4)

4.  Notwithstanding the preceding provisions of this Article, the term “permanent establishment” shall be deemed not to include:

a  the use of facilities solely for the purpose of storage or display 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 or display;

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 sub-paragraph a) to e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

Agent (5)

5.  Notwithstanding the provisions of paragraphs I and 2, where a person - other than an agent of an independent status to whom paragraph 6 applies - is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned State if the person:

a  has and habitually exercises in that State an authority to conclude contracts on behalf of the enterprise, unless his activities are limited to the purchase of goods or merchandise for that enterprise; or

b  has no such authority, but habitually maintains in that State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise.

Independent agent (6)

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

Controlled company (7)

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