Business profits taxation limited to profits attributable to a permanent establishment under the separate enterprise principle. Profits are taxable only in the resident State unless an enterprise 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. Attributable profits are determined by treating the Permanent Establishment as a distinct and separate enterprise dealing independently. Deductions are allowed for expenses incurred for the Permanent Establishment in accordance with local tax law, but exclude non reimbursement charges between the Permanent Establishment and head office such as royalties, fees, commissions, management charges and, except for banks, interest; purchases alone do not create attributed profits.