Permanent establishment: profits attributable to a local fixed place may be taxed in that State under arm's length attribution. Profits are taxable in the resident State unless an enterprise carries on business in the other Contracting State through a permanent establishment, in which case only profits attributable to that permanent establishment may be taxed there. Attribution must treat the permanent establishment as a distinct and separate enterprise on an arm's length basis; deductions for expenses incurred for the permanent establishment are allowed subject to local tax law limits. Purchases alone do not give rise to attributed profits. The attribution method should be applied consistently year to year, and other Articles addressing specific income prevail over this Article.
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.
Permanent establishment: profits attributable to a local fixed place may be taxed in that State under arm's length attribution.
Profits are taxable in the resident State unless an enterprise carries on business in the other Contracting State through a permanent establishment, in which case only profits attributable to that permanent establishment may be taxed there. Attribution must treat the permanent establishment as a distinct and separate enterprise on an arm's length basis; deductions for expenses incurred for the permanent establishment are allowed subject to local tax law limits. Purchases alone do not give rise to attributed profits. The attribution method should be applied consistently year to year, and other Articles addressing specific income prevail over this Article.
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