Article 7 - Business Profits

Multinational Business Profits Taxed Based on Permanent Establishment Location with Arm's Length Profit Allocation Principles

The statutory provision outlines taxation principles for business profits in international contexts. It establishes that an enterprise's profits are primarily taxable in its home state, but can be taxed in another state if a permanent establishment exists. The provisions detail how profits attributed to such establishments should be calculated, including allowable deductions and methods of profit allocation. The text emphasizes arm's length principles and independent assessment of permanent establishment earnings across contracting states.