Taxation of international shipping and air transport profits limited to state of effective management, with limited source-state taxation permitted. Profits from operating ships or aircraft in international traffic are taxable only in the Contracting State of the enterprise's place of effective management, subject to a limited right of the State where the operation is carried on to tax such shipping profits. If effective management is aboard a ship, it is deemed located in the State of the ship's home harbor or, lacking that, the State of the operator's residence. Income from containers used incidentally to international operations is taxable only in the enterprise's resident State unless used solely in the other State, and the rule extends to pools, joint businesses and international operating agencies.
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.
Taxation of international shipping and air transport profits limited to state of effective management, with limited source-state taxation permitted.
Profits from operating ships or aircraft in international traffic are taxable only in the Contracting State of the enterprise's place of effective management, subject to a limited right of the State where the operation is carried on to tax such shipping profits. If effective management is aboard a ship, it is deemed located in the State of the ship's home harbor or, lacking that, the State of the operator's residence. Income from containers used incidentally to international operations is taxable only in the enterprise's resident State unless used solely in the other State, and the rule extends to pools, joint businesses and international operating agencies.
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