Dell – Supreme Court of Spain finds that the local premises of a commissionaire were a fixed place of business of the non-resident principal

In civil law, a commissionaire is an entity that sells in its own name for the account of another. Accordingly, the commissionaire is not a dependent agent for Treaty purposes as it does not habitually exercise “authority to conclude contracts in the name of the [non-]resident.”

The Supreme Court of Spain did not agree with this proposition, finding that in order for the local entity to be a dependent agent there need only be a "functional link" between the customers of the commissionaire and the non-resident principal, so that actual legal authority is unnecessary.

More fundamentally, the Supreme Court held that the premises of the local commissionaire (Dell España SA) constituted a fixed place of business, and thus a PE, of the non-resident (Dell Products Ltd., an Irish company) before even turning to the dependent agent paragraph.

The Court referred to the OECD Commentary statement that premises can be at the disposal of a non-resident even if the non-resident does not hold a formal legal right to use those premises, and then stated “disposal also includes…activity on account of the company.” There was no requirement for the non-resident to have any of its own personnel located on the Spanish premises, as the "fixed place" could be found solely due to activities performed by employees of Dell España SA - so that the business activities performed by Dell España SA should be regarded for treaty purposes as the business of the non-resident carried on in Spain at the Dell España SA premises.

Neal Armstrong. Summary of Gary D. Sprague, "Observations on Treaty Interpretation – Spanish Supreme Court Addresses Commissionaires," Tax Management International Journal, 2016, p 55 under Treaties - Article 5.