Permanent establishment principle: only profits attributable to the PE and related activities may be taxed in the other State.

Profits of an enterprise are taxable only in the residence State unless the enterprise carries on business in the other Contracting State through a permanent establishment, in which case only profits attributable to that permanent establishment, related sales or similar activities may be taxed there; attribution follows an arm's-length approach, allowing deductions for expenses incurred for the permanent establishment while excluding non-reimbursement inter-company payments such as royalties, management fees, commissions and, except for banks, interest.

---

---

---