Bulgaria – Belgium

Permanent Establishment

Art. 5

1. For the purposes of this Convention, the term "permanent establishment" means a fixed place of business through which the business activities of a resident of a Contracting State is wholly or partly carried on in the other Contracting State.

2. The term "permanent establishment" includes especially:

1. a place of management;
2. a branch;
3. an office;
4. a factory;
5. a workshop;
6. a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.

3. A construction or installation project constitutes a permanent establishment only if it lasts more than twelve months.

4. The participation of a Belgian resident in a partnership, set up in accordance with the Bulgarian legislation, is considered to be a permanent establishment, situated in Bulgaria.

5. Notwithstanding the provisions of the preceding paragraphs of this Art., the term "permanent establishment" shall be deemed not to include:

1. the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the resident;
2. the maintenance of a stock of goods or merchandise belonging to the resident solely for the purpose of storage, display or delivery;
3. the maintenance of a stock of goods or merchandise belonging to the resident solely for the purpose of processing by another enterprise;
4. the merchandise belonging to a resident of a Contracting State and exposed on a trade fair or exhibition are sold by that resident after the conclusion of such fair or exhibition;
5. the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information for the resident;
6. the maintenance of a fixed place of business solely for the purpose of carrying on, for the resident, any other activity of a preparatory or auxiliary character;
7. the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (f), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

6. Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent of an independent status to whom the provisions of paragraph 5 apply - is acting on behalf of a resident and has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the resident of a Contracting State, that resident shall be deemed to have a permanent establishment in that Contracting State in respect of any activities which that person undertakes for the resident, unless the activities of such person are limited to those mentioned in paragraph 3 which, if exercised through a fixed place of business, would not make that fixed place of business a permanent establishment under the provisions of that paragraph.

7. A resident shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that Contracting State through a broker, a general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business.