a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; and an agricultural, pastoral or forestry property. [Article 5, paragraph 2] As paragraph 2 of this article is subordinate to paragraph 1, the examples listed in paragraph 2 will only constitute a permanent establishment if the primary definition in paragraph 1 is satisfied. The principles contained in paragraphs 1 through 8 of Article 5 will be applied in determining whether an enterprise can be regarded as a permanent establishment in one of the contracting states. [Article 5, paragraph 9] Building site or installation A building site, construction or installation project will constitute a permanent establishment if it lasts for longer than 12 months. [Article 5, paragraph 3] The phrase site or construction or installation project’ ‘building includes not only places used for the construction of buildings but also for the construction of roads, bridges or canals, the renovation (involving more than mere maintenance or redecoration) of buildings, roads, bridges or canals, the laying of pipelines and excavating and dredging. Planning and supervision are considered part of the building site if carried out by the construction contractor. However, planning and supervision carried out by an un-associated enterprise will not be considered in determining whether the construction contractor has a permanent establishment in Australia. Agricultural, pastoral or forestry property Most of Australia’s tax treaties include as a permanent establishment an agricultural, pastoral or forestry property. This reflects Australia’s usual practice of providing for taxation of profits from the exploitation of Australian land for the purposes of primary production under Article 7 (Business Profits). the Swiss Convention, profits from agriculture or forestry property are dealt with under Article 6 (Income from Immovable This is reflected in the phrase income from Property). ‘including agriculture or forestry’ in paragraph 1 of that article. A fixed place of business used for primary production purposes, such as a farm or forestry property, will constitute a permanent establishment. This has significance for the application of articles where the concept of permanent establishment is relevant, for example in
a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; and an agricultural, pastoral or forestry property. [Article 5, paragraph 2] As paragraph 2 of this article is subordinate to paragraph 1, the examples listed in paragraph 2 will only constitute a permanent establishment if the primary definition in paragraph 1 is satisfied. The principles contained in paragraphs 1 through 8 of Article 5 will be applied in determining whether an enterprise can be regarded as a permanent establishment in one of the contracting states. [Article 5, paragraph 9] Building site or installation A building site, construction or installation project will constitute a permanent establishment if it lasts for longer than 12 months. [Article 5, paragraph 3] The phrase ‘building site or construction or installation project’ includes not only places used for the construction of buildings but also for the construction of roads, bridges or canals, the renovation (involving more than mere maintenance or redecoration) of buildings, roads, bridges or canals, the laying of pipelines and excavating and dredging. Planning and supervision are considered part of the building site if carried out by the construction contractor. However, planning and supervision carried out by an un-associated enterprise will not be considered in determining whether the construction contractor has a permanent establishment in Australia. Agricultural, pastoral or forestry property Most of Australia’s tax treaties include as a permanent establishment an agricultural, pastoral or forestry property. This reflects Australia’s usual practice of providing for taxation of profits from the exploitation of Australian land for the purposes of primary production under Article 7 (Business Profits). the Swiss Convention, profits from agriculture or forestry property are dealt with under Article 6 (Income from Immovable Property). This is reflected in the phrase ‘including income from agriculture or forestry’ in paragraph 1 of that article. A fixed place of business used for primary production purposes, such as a farm or forestry property, will constitute a permanent establishment. This has significance for the application of articles where the concept of permanent establishment is relevant, for example in
C2014-031_Explanatory-Memorandum-Revised-Tax-Treaty-Switzerland.docx