Regulations Governing Application of Agreements for the Avoidance of Double Taxation with Respect to Taxes on Income Article 7

The term “permanent establishment” mentioned in a DTA means a fixed place of business through which the business of an enterprise is wholly or partly carried on. However, in the case that the provisions of the applicable DTA establish other conditions where a permanent establishment may be constituted, be deemed to exist, or be deemed not to include certain situations, provisions thereof shall prevail.An enterprise of the other Contracting State shall be determined to have a permanent establishment in the ROC if the enterprise has the place of business in the territory of the ROC which is in conformity with each of the following subparagraphs:1. A fixed place of business. The term “a fixed place of business” means a particular area that has commercial and geographical coherence with respect to the carrying on of the business, which may include housing, facilities, or equipment that is fixed to stand on the soil of that particular area or remain within that particular area. An enterprise of the other Contracting State shall be considered to have a fixed place of business if the business of the enterprise is carried on through automatic equipment which is operated and maintained by that enterprise;2. With a fixed place of business mentioned in the preceding subparagraph and the business has been carried on continuously for a period of six months through that fixed place of business, or less than six months but the business has been regularly carried on through that fixed place of business; and3. With a fixed place of business mentioned in Subparagraph 1 and that fixed place of business is at the disposal of or used by the enterprise of the other Contracting State.