1.    A constituent entity other than a flow-through entity shall be deemed to be located in the jurisdiction where it is considered as resident for tax purposes based on its place of management, place of creation or similar criteria.

Where the location of a constituent entity other than a flow-through entity cannot be determined based on the first subparagraph, it shall be deemed to be located in the jurisdiction where it was created.

2.    A flow-through entity shall be considered as stateless, unless it is the ultimate parent entity of an MNE group or it is required to apply an income inclusion rule in accordance with Articles 5, 6 and 7, in which case the flow-through entity shall be deemed to be located in the jurisdiction where it was created.

3.    A permanent establishment as defined in Article 3, point (10)(a), shall be deemed to be located in the jurisdiction where it is treated as a permanent establishment and liable to tax under the applicable tax treaty in force.

A permanent establishment as defined in Article 3, point (10)(b), shall be deemed to be located in the jurisdiction where it is subject to income taxation based on its business presence.

A permanent establishment as defined in Article 3, point (10)(c), shall be deemed to be located in the jurisdiction where it is situated.

A permanent establishment as defined in Article 3, point (10)(d), shall be considered as stateless.

4.    Where a constituent entity can be deemed to be located in two jurisdictions and those jurisdictions have an applicable tax treaty, the constituent entity shall be deemed to be located in the jurisdiction where it is considered as resident for tax purposes under that tax treaty.

Where the applicable tax treaty requires that the competent authorities reach a mutual agreement on the deemed residence for tax purposes of the constituent entity, and no agreement is reached, paragraph 5 shall apply.

Where there is no relief for double taxation under the applicable tax treaty, due to the fact that a constituent entity is resident for tax purposes in both jurisdictions that are contracting parties thereto, paragraph 5 shall apply.

5.    Where a constituent entity can be deemed to be located in two jurisdictions and those jurisdictions do not have an applicable tax treaty, the constituent entity shall be deemed to be located in the jurisdiction which charged the higher amount of covered taxes for the fiscal year.

For the purpose of calculating the amount of covered taxes referred to in the first in subparagraph, the amount of tax paid in accordance with a controlled foreign company tax regime shall not be taken into consideration.

If the amount of covered taxes due in the two jurisdictions is the same or zero, theconstituent entity shall be deemed to be located in the jurisdiction where it has the higher amount of substance-based income exclusion computed on an entity basis in accordance with Article 27.

If the amount of the substance-based income exclusion in the two jurisdictions is the same or zero, the constituent entity shall be considered as stateless, unless it is an ultimate parent entity, in which case it shall be deemed to be located in the jurisdiction where it was created.

6.    Where, as a result of applying paragraphs 4 and 5, a parent entity is deemed to be located in a jurisdiction where it is not subject to a qualified income inclusion rule, it shall be deemed to be subject to the qualified income inclusion rule of the other jurisdiction, unless an applicable tax treaty in force prohibits the application of suchrule.

7.    Where a constituent entity changes its location in the course of a fiscal year, it shall be deemed to be located in the jurisdiction where it was deemed to be located under this Article at the beginning of that fiscal year.

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