Article 6 — Location of a constituent entity that is a permanent establishment

This Article locates a permanent establishment after its category under Law Article 1 has been identified; it does not establish one from a business address alone. For the treaty category, use the jurisdiction that treats it as a permanent establishment and to which the treaty allocates taxing rights.

Without an applicable treaty, a place or deemed place of business taxed locally on net income similarly to residents is located in that taxing jurisdiction. In a jurisdiction without corporate income tax, the third category requires a place that would be a permanent establishment under the Model Tax Convention, with taxing rights over its income under Article 7; if that test is met, use where the establishment is situated. Article 6 does not locate a category D establishment; under Law Article 5(D) it is treated as a stateless Constituent Entity. Match the result to the correct definition paragraph and read it with Bahrain’s rule in Law Article 5(D) and Regulations Article 4.

The main entity’s location does not automatically determine its permanent establishment’s location. Locate each before allocating income and taxes and computing the jurisdictional result; common legal identity does not by itself justify blending both in Bahrain.