Business profits: taxation confined to resident enterprise unless a permanent establishment in the other State attributes taxable profits. Business profits are taxable in the enterprise's State of residence unless business is carried on in the other Contracting State through a permanent establishment, in which case only profits attributable to that permanent establishment may be taxed there. Attribution should reflect the profits a distinct and separate enterprise would earn under similar conditions, allowing deductions for expenses incurred for the permanent establishment's business in line with local law, but disallowing non reimbursed intra enterprise charges such as royalties, commissions, management fees and, except for banks, interest.
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.
Business profits: taxation confined to resident enterprise unless a permanent establishment in the other State attributes taxable profits.
Business profits are taxable in the enterprise's State of residence unless business is carried on in the other Contracting State through a permanent establishment, in which case only profits attributable to that permanent establishment may be taxed there. Attribution should reflect the profits a distinct and separate enterprise would earn under similar conditions, allowing deductions for expenses incurred for the permanent establishment's business in line with local law, but disallowing non reimbursed intra enterprise charges such as royalties, commissions, management fees and, except for banks, interest.
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