Other income taxation: residence generally controls taxability, but source taxation applies when income is effectively connected to a permanent establishment or fixed base. Income of a resident not expressly covered elsewhere in the Convention is generally taxable only in the State of residence, but if the recipient carries on business through a permanent establishment or performs independent personal services from a fixed base in the other State and the income is effectively connected with that establishment or base, the source State may tax the income under the allocation rules for business profits or independent personal services; notwithstanding these rules, the other State may also tax such residual items of income.
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.
Other income taxation: residence generally controls taxability, but source taxation applies when income is effectively connected to a permanent establishment or fixed base.
Income of a resident not expressly covered elsewhere in the Convention is generally taxable only in the State of residence, but if the recipient carries on business through a permanent establishment or performs independent personal services from a fixed base in the other State and the income is effectively connected with that establishment or base, the source State may tax the income under the allocation rules for business profits or independent personal services; notwithstanding these rules, the other State may also tax such residual items of income.
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