Business profits taxation limited to residence unless a permanent establishment generates attributable taxable profits in the other State.

Business profits are taxable only in the State of residence unless an enterprise operates in the other Contracting State through a permanent establishment; then only profits attributable to that permanent establishment, related sales, or similar activities may be taxed there. Profits attributable are determined by treating the permanent establishment as a distinct and separate enterprise acting under similar conditions. Deductions are allowed for expenses incurred for the permanent establishment (including executive and general administrative expenses) under the domestic law of the State where it is situated, but non reimbursement payments between head office and permanent establishment such as royalties, commissions, management fees, and, except for banks, interest are not deductible or to be taken into account.

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