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<h1>Article 7 of DTAA: Business Profits Taxed Only in Home State Unless Permanent Establishment Exists Elsewhere</h1> Article 7 of the Double Taxation Avoidance Agreement (DTAA) between two Contracting States addresses the taxation of business profits. Profits of an enterprise are taxable only in its home state unless it operates through a permanent establishment in the other state. In such cases, only profits attributable to that establishment may be taxed in the other state. Deductions for expenses incurred by the permanent establishment are allowed, except for certain payments to the head office. Profits are determined consistently unless justified otherwise, and customary profit apportionment methods may be used, provided they align with the Article's principles.