Permanent establishment profits are attributed to the PE and taxed there under separate enterprise attribution and deduction rules. Profits of an enterprise are taxable only in the State of residence unless business is carried on in the other State through a permanent establishment, in which case only profits attributable to that permanent establishment may be taxed there. Attribution treats the permanent establishment as a distinct and separate enterprise; allowable deductions include expenses incurred for the permanent establishment, subject to local tax law, but exclude non reimbursement charges between the permanent establishment and head office such as royalties, fees, commissions, management charges and, except for banking, interest.
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 profits are attributed to the PE and taxed there under separate enterprise attribution and deduction rules.
Profits of an enterprise are taxable only in the State of residence unless business is carried on in the other State through a permanent establishment, in which case only profits attributable to that permanent establishment may be taxed there. Attribution treats the permanent establishment as a distinct and separate enterprise; allowable deductions include expenses incurred for the permanent establishment, subject to local tax law, but exclude non reimbursement charges between the permanent establishment and head office such as royalties, fees, commissions, management charges and, except for banking, interest.
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