Australian Tax Treaties
Hungarian Agreement
AGREEMENT BETWEEN AUSTRALIA AND THE REPUBLIC OF HUNGARY FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
ARTICLE 5
Permanent Establishment
(1)
For the purposes of this Agreement, the term " permanent establishment " means a fixed place of business or production through which the activities of an enterprise are 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, an oil or gas well, a quarry or any other place of extraction of natural resources;
(g) a farm or forest;
(h) a building site or construction, installation or assembly project which exists for more than 12 months.
(3)
An enterprise shall not be deemed to have a permanent establishment merely by reason of:
(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; or
(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; or
(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; or
(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; or
(e) the maintenance of a fixed place of business solely for the purpose of activities which have a preparatory or auxiliary character for the enterprise; or
(f) the maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs (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.
(4)
An enterprise shall be deemed to have a permanent establishment in one of the Contracting States and to carry on business through that permanent establishment if:
(a) it carries on supervisory activities in that State for more than 12 months in connection with a building site, or a construction, installation or assembly project which is being undertaken in that State; or
(b) substantial equipment is being used in that State for more than 12 months by, for or under contract with the enterprise in, or in respect of, the exploration for or the exploitation of natural resources, or in respect of activities connected with such exploration or exploitation.
(5)
A person acting in one of the Contracting States on behalf of an enterprise of the other Contracting State - other than an agent of an independent status to whom paragraph (6) applies - shall be deemed to be a permanent establishment of that enterprise in the firstmentioned State if the person has, and habitually exercises in that State, an authority to conclude contracts on behalf of the enterprise, unless the person ' s activities are limited to the purchase of goods or merchandise for the enterprise.
(6)
An enterprise of one of the Contracting States shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a person who is a broker, general commission agent or any other agent of an independent status and is acting in the ordinary course of the person ' s business as such a broker or agent.
(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 make either company a permanent establishment of the other.
(8)
The principles set forth in the preceding paragraphs of this Article shall be applied in determining for the purposes of this Agreement whether there is a permanent establishment outside both Contracting States, and whether an enterprise, not being an enterprise of one of the Contracting States, has a permanent establishment in one of the Contracting States.
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI) has modified the application of this tax treaty. A synthesised text of the MLI and this tax treaty is available to facilitate the understanding of how the MLI modifies this tax treaty.
For the purposes of this Agreement, the term " permanent establishment " means a fixed place of business or production through which the activities of an enterprise are 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, an oil or gas well, a quarry or any other place of extraction of natural resources;
(g) a farm or forest;
(h) a building site or construction, installation or assembly project which exists for more than 12 months.
(3)
An enterprise shall not be deemed to have a permanent establishment merely by reason of:
(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; or
(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; or
(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; or
(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; or
(e) the maintenance of a fixed place of business solely for the purpose of activities which have a preparatory or auxiliary character for the enterprise; or
(f) the maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs (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.
(4)
An enterprise shall be deemed to have a permanent establishment in one of the Contracting States and to carry on business through that permanent establishment if:
(a) it carries on supervisory activities in that State for more than 12 months in connection with a building site, or a construction, installation or assembly project which is being undertaken in that State; or
(b) substantial equipment is being used in that State for more than 12 months by, for or under contract with the enterprise in, or in respect of, the exploration for or the exploitation of natural resources, or in respect of activities connected with such exploration or exploitation.
(5)
A person acting in one of the Contracting States on behalf of an enterprise of the other Contracting State - other than an agent of an independent status to whom paragraph (6) applies - shall be deemed to be a permanent establishment of that enterprise in the firstmentioned State if the person has, and habitually exercises in that State, an authority to conclude contracts on behalf of the enterprise, unless the person ' s activities are limited to the purchase of goods or merchandise for the enterprise.
(6)
An enterprise of one of the Contracting States shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a person who is a broker, general commission agent or any other agent of an independent status and is acting in the ordinary course of the person ' s business as such a broker or agent.
(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 make either company a permanent establishment of the other.
(8)
The principles set forth in the preceding paragraphs of this Article shall be applied in determining for the purposes of this Agreement whether there is a permanent establishment outside both Contracting States, and whether an enterprise, not being an enterprise of one of the Contracting States, has a permanent establishment in one of the Contracting States.
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