Permanent establishment profits may be taxed where attributable, determined as if the PE were a distinct and separate enterprise. Profits of an enterprise are taxable only in the State of residence unless the enterprise carries on business through a permanent establishment in the other State, in which case only profits attributable to that permanent establishment may be taxed there. Attributable profits are determined by the separate and independent enterprise principle and permit deductions for expenses incurred for the purposes of the permanent establishment, subject to domestic law; mere purchase of goods does not give rise to attributed profits, and attribution methods should be applied consistently 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.
Permanent establishment profits may be taxed where attributable, determined as if the PE were a distinct and separate enterprise.
Profits of an enterprise are taxable only in the State of residence unless the enterprise carries on business through a permanent establishment in the other State, in which case only profits attributable to that permanent establishment may be taxed there. Attributable profits are determined by the separate and independent enterprise principle and permit deductions for expenses incurred for the purposes of the permanent establishment, subject to domestic law; mere purchase of goods does not give rise to attributed profits, and attribution methods should be applied consistently year to year.
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