Permanent establishment determines taxable business profits; only profits attributable to the permanent establishment may be taxed elsewhere. Profits of an enterprise are taxable in the State of residence unless business is carried on in the other State through a permanent establishment, in which case only profits attributable to that permanent establishment may be taxed there. Profits attributable must reflect what the permanent establishment would earn as a separate enterprise under similar conditions; reasonable estimates are permitted. Deductions include expenses incurred for the permanent establishment, but not inter office charges (other than reimbursement of actual expenses) for royalties, services, commissions or, except for banks, interest. Customary apportionment methods may be used if consistent with these principles, and the method should be applied consistently year to year.