In May 2001 the German Federal Tax Court decided on grounds of the German-Hungarian Tax Treaty the question of how to apply the twelve month test in case of building sites, construction or installation projects as per Art. 5 para. 3 OECD-Model Tax Convention. The Court ruled, that the twelve month test relevant to determine the existence of a permanent establishment should apply to each individual site or project, even if the construction sites are geographically very close, as long as the works are independent from each other. The Court further clarified that a construction site only can be a fixed place of business if the time-test is satisfied and that a „dependent agent" can be deemed to constitute a permanent establishment only if he is authorised to conclude contracts and makes use of this authority repeatedly and not merely in one isolated case. Stefan Bendlinger analyses the ruling which may be relevant also to interprete Austrian Tax Treaties.