Bulgaria - 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 or department; and 

f  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 or construction or installation project constitutes a permanent establishment only if it lasts more than 9 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, 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, for example goods or merchandise that are exhibited at any trade fair or sold after the trade fair is ended; 

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  a construction or installation or assembly project carried on by an enterprise of one of the States on account of a contract for the delivery of machinery or equipment from that State into the other State; 

g  the maintenance of a fixed place of business solely for any combination of activities mentioned in sub- paragraphs (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. 

5. Notwithstanding the provisions of paragraphs 1 and 2, the following types of activities of a resident of a State shall also be deemed not to be carried on through a permanent establishment in the other State: the maintenance of a fixed place of business solely for the purpose of the facilitation of the conclusion or the mere signing of contracts concerning loans, the delivery of goods or merchandise or technical services, whether or not these activities are activities of a preparatory or auxiliary character or main activities for that person.

Agent (5)

6. Notwithstanding the provisions of paragraphs 1 and 2, where a person -other than an agent of an independent status to whom paragraph 7 applies -is acting on behalf of an enterprise and has, and habitually exercises, in one of the States an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph.

Independent agent (6)

7. An enterprise shall not be deemed to have a permanent establishment in one of the States 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)

8.  The fact that a company which is a resident of one of the States controls or is controlled by a company which is a resident of the other 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.