Berechnung der Baustellen- und Dienstleistungsfrist im DBA-China

According to art. 5 para. 3 of the Austro-Chinese Double Taxation Convention, a construction project (including supervisory activities in connection therewith) shall create a permanent estblishment if it lasts for more than six months (subpara. a); the same goes for services furnished by an enterprise through employees (subpara. b).

If an Austrian enterprise signed on 29 August of year 1 a contract with a Chinese steel company for the construction of a Waste Gas Cleaning & Gas Recovery System in China whereby the contract scope includes supply of equipment, technical documentation related to the equipment, the transfer of know-how and the provision of technical services, S. 149then a permanent establishment would be created only if such activities were carried out in China for a period exceeding six months. The starting point for the calculation of the time period is not the day of signature of the contract but the day on which the activities physically commenced in China. If the activities started on 19 March of year 2, then the six month period would end on 19 September of year 2. A completion of the activities on 22 August of year 2, therefore, cannot create a permanent establishment i...