Permanent establishment rules limit taxation to profits attributable to the foreign business presence under separate enterprise attribution. Profits of an enterprise are taxable only in its resident State unless business is carried on in the other State through a permanent establishment, where taxable profits are those attributable to that permanent establishment determined as if it were a distinct and separate enterprise. Deductions are allowed for expenses incurred for the permanent establishment's business, but not for non reimbursed payments between the permanent establishment and the head office by way of royalties, fees, commissions, management charges or, except for banks, interest. Apportionment methods customary in a State may be used if consistent with these principles, no profit is attributed for mere purchases, and the attribution method should remain consistent year to year.