Australian Tax Treaties

Indonesian Agreement  

AGREEMENT BETWEEN THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF THE REPUBLIC OF INDONESIA 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 " , in relation to an enterprise, means a fixed place of business through which the business of the 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 mine, an oil or gas well, a quarry or any other place of extraction of natural resources or a place of exploration for natural resources;

(g) a farm, plantation or other place where agricultural, pastoral, forestry or plantation activities are carried on;

(h) an installation, drilling rig or ship used for exploration for or exploitation of natural resources, where that use continues for more than 120 days;

(i) a building site or construction, installation or assembly project or supervisory activities in connection with that site or project, where that site, project or activities exist for more than 120 days;

(j) the furnishing of services, including consultancy services, by an enterprise within one of the Contracting States through employees or other personnel engaged by the enterprise for that purpose, if those services are furnished, for the same or a connected project, within that State for a period or periods aggregating more than 120 days within any 12 month period.

(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 or display 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 or display; 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 preparatory or auxiliary character for the enterprise, such as advertising or scientific research.

(4)    
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 5 applies - shall be deemed to be a permanent establishment of that enterprise in the firstmentioned State if:

(a) in so acting, the person manufactures or processes in that State for the enterprise goods or merchandise belonging to the enterprise; or

(b) 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; or

(c) the person has no such authority, but habitually maintains in the firstmentioned State a stock of goods or merchandise from which the person regularly delivers goods or merchandise on behalf of the enterprise.

(5)    
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. However, when the activities of such a broker or agent are carried on wholly or principally on behalf of that enterprise itself or on behalf of that enterprise and other enterprises controlling, or controlled by or subject to the same common control as, that enterprise, the person will not be considered a broker or agent of an independent status within the meaning of this paragraph.

(6)    
The fact that a company which is a resident of one of the Contracting States 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.

(7)    
The principles set forth in the preceding paragraphs of this Article shall be applied in determining for the purposes of paragraph 5 of Article 11 and paragraph 5 of Article 12 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.