Thailand - Permanent establishment

Article 5. Permanent establishment

Representative office

1.  For the purposes of this Convention, the term "permanent establishment" means a fixed place of business in which the business of the 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 other place of extraction of natural resources. 

Building site/ project

3.  Notwithstanding the provisions of paragraphs 1 and 2, the term "permanent establishment" shall include a building site or construction or assembly project only if it exists for more than 

a  six months, in the case of installation or setting up of plant equipment or machinery including the auxiliary construction as is necessary for such installation; 

b  three months, in all other cases. 

4.  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.  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 6 applies shall be deemed to be a permanent establishment in the first-mentioned State if - 

a  he has, and habitually exercises in the first-mentioned 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; or 

b  be habitually maintains in the first-mentioned State a stock of goods or merchandise belonging to the enterprise from which he regularly fills orders on behalf of the enterprise; or 

c  he habitually secures orders in the first-mentioned State, wholly or almost wholly for the enterprise itself, or for the enterprise and other enterprises which are controlled by it or have a controlling interest in it. 

Independent agent

6. 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. This shall not apply if such broker or agent carries on in that other State an activity described in paragraph 5 wholly or almost wholly for the enterprise itself or for the enterprise and other enterprises which are controlled by or have a controlling interest in it.

Controlled company

7. 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.