Taxation of shipping profits limited to place of effective management, with limited source-state taxing rights under transitional conditions. Profits from operating ships in international traffic are taxable only in the State of the enterprise's place of effective management, except that a limited source-State taxing right exists where operations in that State are more than casual; that right applies to profits from carriage embarked in the source State, is capped as a fraction of sums receivable for such carriage, attracts a reduced tax rate, and is limited to an initial transitional series of fiscal years. Interest connected with ship operations is treated as shipping profits, and shipping profits include container-related income, rental (including bareboat) incidental to international traffic, and pool or joint-operation participation profits.
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Provisions expressly mentioned in the judgment/order text.
Taxation of shipping profits limited to place of effective management, with limited source-state taxing rights under transitional conditions.
Profits from operating ships in international traffic are taxable only in the State of the enterprise's place of effective management, except that a limited source-State taxing right exists where operations in that State are more than casual; that right applies to profits from carriage embarked in the source State, is capped as a fraction of sums receivable for such carriage, attracts a reduced tax rate, and is limited to an initial transitional series of fiscal years. Interest connected with ship operations is treated as shipping profits, and shipping profits include container-related income, rental (including bareboat) incidental to international traffic, and pool or joint-operation participation profits.
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