Page:United States Statutes at Large Volume 62 Part 2.djvu/481

 62 STAT.] NETHERLANDS-DOUBLE TAXATION-APR. 29, 1948 (i) The term "permanent establishment", when used with re- spect to an enterprise of one of the Contracting States, means a branch, factory, or other fixed place of business, but does not include an agency unless the agent has, and habitually exercises, a general authority to negotiate and conclude contracts on behalf of such enterprise or has a stock of merchandise from which he regularly fills orders on behalf of such enterprise. 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 car- ries on business dealings in such other Contracting State through a bona fide commission agent, broker or custodian acting in the ordi- nary course of his business as such. The fact that an enterprise of one of the Contracting States maintains in the other Contracting State a fixed place of business exclusively for the purchase of goods or merchandise shall not of itself constitute such fixed place of business a permanent establishment of such enterprise. When a corporation of one Contracting State has a subsidiary corporation which is a corporation of the other Contracting State or which is engaged in trade or business in such other Contracting State, such subsidiary corporation shall not, merely because of that fact, be deemed to be a permanent establishment of its parent corporation. (j) The term "competent authority" or "competent authorities" means, in the case of the United States, the Commissioner of Internal Revenue or his duly authorized representative; in the case of the Netherlands, the Directeur-Generaal der Belastingen or his duly authorized representative; and, in the case of any part or territory to which provisions of the present Convention are extended under Article XXVII, the competent authority for the administration in such part or territory of the taxes to which such provisions apply. (2) In the application of the provisions of the present Convention by either of the Contracting States, any term which is not defined in the present Convention shall, unless the context otherwise requires, have the meaning which that term has under the laws of such Contract- ing State relating to the taxes which are the subject of the present Convention. ArmCLE III (1) An enterprise of one of the Contracting States shall not be sub- ject to taxation by the other Contracting State in respect of its indus- trial or commercial profits unless it is engaged in trade or business in the other Contracting State through a permanent establishment situ- ated therein. If it is so engaged the other Contracting State may im- pose the tax only upon the income of such enterprise from sources within such other State. (2) Where an enterprise of one of the Contracting States is engaged in trade or business in the other Contracting State through a perma- nent establishment situated therein, there shall be attributed to such permanent establishment the industrial or commercial profits which it might be expected to derive if it were an independent enterprise 1759 "Permanent estab- lishment." "Competentauthor- ity." PFtg, p. 1768. Tax on profits; re- striction.

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