Permanent establishment rules determine when business profits may be taxed in the other state through attributable profits. Business profits are taxable in the State of residence unless an enterprise carries on business in the other Contracting State through a permanent establishment, in which case only profits attributable to that permanent establishment or to sales of the same or similar goods may be taxed there; attribution follows the separate enterprise principle, allows reasonable estimation where necessary, admits deductions for establishment-related expenses under local tax law, permits customary apportionment consistent with these principles, excludes mere purchases from attribution, and requires year-to-year consistency absent good reason to change.
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 determine when business profits may be taxed in the other state through attributable profits.
Business profits are taxable in the State of residence unless an enterprise carries on business in the other Contracting State through a permanent establishment, in which case only profits attributable to that permanent establishment or to sales of the same or similar goods may be taxed there; attribution follows the separate enterprise principle, allows reasonable estimation where necessary, admits deductions for establishment-related expenses under local tax law, permits customary apportionment consistent with these principles, excludes mere purchases from attribution, and requires year-to-year consistency absent good reason to change.
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