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A significant number of treaties do not include services PE provisions, but instead include provisions that deal with specific types of services, such as the use of substantial equipment, supervisory activities in connection with a construction site, or insurance activities. These provisions usually take the form of extensions to the definition of PE, but may also be included as a separate article, e.g. in the context of offshore natural resource activities. Some of these provisions were described in Seminar A at the IFA Congress held in Vancouver in 2009.

The UN Model definition of PE includes a provision dealing specifically u'ith insurance enterprises. Paragraph 6 of Article 5 of the UN Model deems an insurance enterprise, except with regard to reinsurance, to have a PE in a jurisdiction if it collects premiums or insures risks in that jurisdiction through a person other than an independent agent. The OECD Commentary on Article 5 of the OECD Model also recognises that foreign insurance enterprises can do large-scale business in another country without establishing a PE under the usual rules, and that some countries may wish to include a deemed PE provision in respect of insurance activities in their treaties. Some branch reports noted that treaties concluded by their jurisdiction commonly included this provision. Some treaties, such as those negotiated by Australia and New Zealand, provide for source taxation of insurance activities in a different way, i.e. by preserving the operation of domestic law in respect of income from insurance.

The UN Model also includes as a PE supervisory activities in connection with construction, assembly or installation projects, but only where these activities last more than six months. Such provisions are frequently found in treaties of the reporting jurisdictions.

With respect to paragraph 3 of Article 5 of the OECD Model, prior to 2003 the OECD Commentary stated that

“Planning and supervision of the erection of a building are covered by ['building site, construction or installation project’], if carried out by the building contractor. However, planning and supervision is not included if carried out by another enterprise whose activities in connection with the construction concerned are restricted to planning and supervising the work.”

 

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