Permanent establishment rules allocate enterprise profits to the establishment for taxation when business is carried on through a fixed presence. Profits of an enterprise are taxable only in its State of residence unless it carries on business through a permanent establishment in the other State; profits attributable to that permanent establishment may be taxed there. Attributable profits are determined as if the permanent establishment were a distinct and separate enterprise, allowing deductions for expenses incurred for its business in accordance with the tax law of the State where it is situated. No profits are attributed solely for purchases of goods, and the method of attribution should be applied consistently year to year unless justified otherwise.
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 rules allocate enterprise profits to the establishment for taxation when business is carried on through a fixed presence.
Profits of an enterprise are taxable only in its State of residence unless it carries on business through a permanent establishment in the other State; profits attributable to that permanent establishment may be taxed there. Attributable profits are determined as if the permanent establishment were a distinct and separate enterprise, allowing deductions for expenses incurred for its business in accordance with the tax law of the State where it is situated. No profits are attributed solely for purchases of goods, and the method of attribution should be applied consistently year to year unless justified otherwise.
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