Permanent establishment: profits attributable to a PE may be taxed in the source state for PE activities or similar sales.

Profits are taxable in the State of residence unless an enterprise carries on business in the other Contracting State through a permanent establishment, in which case the other State may tax only profits attributable to that permanent establishment, sales of the same or similar goods, or other similar business activities. Profits attributable to the permanent establishment are determined as if it were a separate independent enterprise under similar conditions, allowing deductions for expenses incurred for the permanent establishment subject to the taxation laws of the State where it is situated; mere purchases do not give rise to attributed profits.

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