1. Introduction

In this era of digital economy, robots and remotely-operated computerized equipment are gradually taking over many work sites. In near future, in many cases, a ‘fixed place of business’ (a prerequisite for existence of a permanent establishment) may be operated entirely without human involvement at the work site. For instance, an enterprise could produce goods in a foreign country (Source State) in a ‘lights-out factory’. Wikipedia defines “lights-out factories” as factories that are “fully automated and require no human presence on-site”.

Could a foreign enterprise’s fully-automated fixed place of business in a Source State, without presence of human beings (such as a lights-out factory), be regarded as a fixed place permanent establishment (PE)? This question no longer seems academic. For instance, a Japanese robotics company (FANUC), already operates a lights-out factory where robots manufacture other robots [source: Wikipedia].This article examines as to whether human presence is a prerequisite for existence of a fixed place permanent establishment.

For that purpose, we would take into account judicial precedents/ rulings from Germany, India, and Italy.