Business profits: taxable only in the home state unless a permanent establishment exists, then attributable profits taxed. Profits are taxable only in the residence State 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. Attribution follows the separate enterprise principle, assigning profits the permanent establishment would earn dealing independently. Deductions include expenses incurred for the permanent establishment's business, subject to local tax law limits. Customary apportionment may be used if consistent with these principles; mere purchasing of goods does not generate attributable profits and methods should remain consistent year to year.
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: taxable only in the home state unless a permanent establishment exists, then attributable profits taxed.
Profits are taxable only in the residence State 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. Attribution follows the separate enterprise principle, assigning profits the permanent establishment would earn dealing independently. Deductions include expenses incurred for the permanent establishment's business, subject to local tax law limits. Customary apportionment may be used if consistent with these principles; mere purchasing of goods does not generate attributable profits and methods should remain consistent year to year.
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