Business profits allocation: Permanent establishments permit taxation of attributable profits in the source state under arm's length principle. Profits of an enterprise are taxable only in its State unless it carries on business in the other Contracting State through a permanent establishment; then only profits attributable to that permanent establishment may be taxed there. Attribution treats the permanent establishment as a distinct and separate enterprise under similar conditions; allowable deductions include expenses incurred for its business per the tax law of the State where it is situated, while non deductible or non recognised items include intra enterprise royalties, commissions, management charges and, except for banks, interest on internal loans.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Business profits allocation: Permanent establishments permit taxation of attributable profits in the source state under arm's length principle.
Profits of an enterprise are taxable only in its State unless it carries on business in the other Contracting State through a permanent establishment; then only profits attributable to that permanent establishment may be taxed there. Attribution treats the permanent establishment as a distinct and separate enterprise under similar conditions; allowable deductions include expenses incurred for its business per the tax law of the State where it is situated, while non deductible or non recognised items include intra enterprise royalties, commissions, management charges and, except for banks, interest on internal loans.
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