Tax Treaty Case Law around the Globe 2024

8.1. Introduction

The issue in the case decided by the Polish Supreme Administrative Court (SAC) on 16 February 2023 (II FSK 1864/20) concerned whether a warehouse rented by a Polish company from an external entity to carry on business in Romania will be considered a PE within the meaning of article 4a(11) of the Polish Corporate Income Tax Act (CITA) and article 5 of the Poland-Romania DTC (1994).

Article 4a(11) of the CITA defines the term PE in a similar way as article 5(1) of the Poland-Romania DTC which stipulates that the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried out. Examples listed in article 5(2) of the Treaty include a place of management, a branch, an office, a factory, a workshop, and a mine, an oil or gas well, a quarry or any other place of extraction of natural resources. However, pursuant to article 5(4)(a) of the Treaty, the term “permanent establishment” shall be deemed not to include the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise. Article 5(4)(b) stipulates that the maintenance of a stock of g...