Italy - 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" shall include especially:
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, quarry or any other place of extraction of natural resources;
(g) a building site or construction or assembly project which exists for more than twelve months.

Representative office (3)

Building site/ project (4)

3. The term "permanent establishment" shall not be deemed 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.

Agent (5)

4. A person acting in one of the States on behalf of an enterprise of the other State - other than an
agent of an independent status to whom paragraph 5 applies - shall be deemed to be a permanent
establishment in the first-mentioned State if he has, and habitually exercises, in that State, an
authority to conclude contracts in the name of the enterprise, unless his activities are limited to the
purchase of goods or merchandise for the enterprise.

Independent agent (6)

5. An enterprise of one of the States shall not be deemed to have a permanent establishment in the
other State merely because it carries on business in that other State through a broker, general
commission agent or any other agent of an independent status, where such persons are acting in the
ordinary course of their business.

Controlled company (7)

6. 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.