1.         Introduction

For a foreign enterprise to be regarded as having a fixed place permanent establishment under Art. 5(1) of a contemporary tax treaty, inter alia, there must exist a ‘fixed’ place of business in the source state, through which the business of the enterprise wholly or partly carried on. For a place of business to be regarded as ‘fixed’, the place of business must have certain ‘degree of permanence’. This requirement is often referred to as the ‘duration test’. But, Art. 5(1) in the tax treaties does not specify the time-threshold for satisfaction of the duration test.

Often, six-month is regarded as the threshold for the duration test. But, occasionally we face a question as to whether a period much shorter than six months could satisfy the duration test. This article analyzes some select precedents dealing with that aspect.