A term used in determining tax liability for companies that operate in multiple jurisdictions; in broad terms it means the company’s fixed (that is, its primary) place of business.

The term permanent establishment originates in the tax treaty guidelines published by the Organisation for Economic Cooperation and Development.

It appears in Chinese double taxation treaties with other countries. It is normal for individual double taxation treaties to set out specific inclusions and exclusions to what constitutes a permanent establishment for the purposes of that treaty.