Tax treaty provisions on permanent establishment and income allocation may be resolved by mutual agreement between competent authorities.

The Protocol clarifies that tax excludes penalties and default amounts, treats rented warehouses as constituting a permanent establishment, and mandates consultation between competent authorities to resolve doubts about similarity of goods or activities and to consider changes to deductibility rules for permanent establishments. It treats interest connected with international air and sea operations as operational profits not subject to Article 12, exempts certain Spanish non corporation taxed entity income from paragraph 2 of Article 11, provides for review of the royalties and technical services article and alignment with later India-third State conventions, and sets conditions on deductibility, exchange of information techniques, assistance in tax collection, and a transaction based Limitation of Benefit definition.

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