Business profits taxation: only profits attributable to a permanent establishment may be taxed in the other State.

Profits of an enterprise are taxable only in its State of residence unless it carries on business in the other State through a permanent establishment, in which case only profits attributable to that permanent establishment may be taxed there. Profits attributed must reflect what the permanent establishment would earn as a separate enterprise under similar conditions, allowing deductions for expenses incurred for its business subject to domestic limitations, while excluding non reimbursed intercompany payments such as royalties, management fees, commissions and, except for banks, interest.

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