Business profits taxation: only income attributable to a permanent establishment may be taxed in the other contracting state. Profits of an enterprise are taxable only in the state of residence unless the enterprise carries on business in the other State through a permanent establishment; then only profits attributable to that permanent establishment may be taxed there. Attribution follows the separate enterprise principle, allowing deduction of expenses incurred for the permanent establishment, including executive and administrative costs incurred in or outside the State. Customary apportionment methods may be used if consistent with the Article. No profits arise merely from purchases by the permanent establishment, and the attribution method should be applied year to year unless justified otherwise.
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.
Business profits taxation: only income attributable to a permanent establishment may be taxed in the other contracting state.
Profits of an enterprise are taxable only in the state of residence unless the enterprise carries on business in the other State through a permanent establishment; then only profits attributable to that permanent establishment may be taxed there. Attribution follows the separate enterprise principle, allowing deduction of expenses incurred for the permanent establishment, including executive and administrative costs incurred in or outside the State. Customary apportionment methods may be used if consistent with the Article. No profits arise merely from purchases by the permanent establishment, and the attribution method should be applied year to year unless justified otherwise.
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