Permanent establishment attribution limits taxation to profits attributable to the permanent establishment under the treaty. Taxation of business profits is limited to the State of the enterprise unless business is carried on in the other Contracting State through a permanent establishment, in which case only profits attributable to that permanent establishment may be taxed there. Such profits are determined by attributing to the permanent establishment the profits it would be expected to make as a distinct and separate enterprise, allowing deductions for expenses incurred for its business under the taxing State's law, excluding mere purchase of goods, and applying the same attribution method year by year unless justified reasons require change.
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 attribution limits taxation to profits attributable to the permanent establishment under the treaty.
Taxation of business profits is limited to the State of the enterprise unless business is carried on in the other Contracting State through a permanent establishment, in which case only profits attributable to that permanent establishment may be taxed there. Such profits are determined by attributing to the permanent establishment the profits it would be expected to make as a distinct and separate enterprise, allowing deductions for expenses incurred for its business under the taxing State's law, excluding mere purchase of goods, and applying the same attribution method year by year unless justified reasons require change.
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