Permanent establishment taxation: profits taxable only if attributable to a PE, attributed on arm's length basis with allowable deductions. Profits of an enterprise are taxable in the other Contracting State only if derived through a permanent establishment, and only to the extent attributable to that PE. Profits attributable to a PE are determined as if the PE were a distinct and separate enterprise under similar conditions dealing independently. Expenses incurred for the PE, including executive and general administrative expenses, are allowable deductions under the taxing State's laws; purchases of goods do not by themselves create attributable profits. The attribution method must be applied consistently year to year, and other Articles govern separately dealt with income items.
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 taxation: profits taxable only if attributable to a PE, attributed on arm's length basis with allowable deductions.
Profits of an enterprise are taxable in the other Contracting State only if derived through a permanent establishment, and only to the extent attributable to that PE. Profits attributable to a PE are determined as if the PE were a distinct and separate enterprise under similar conditions dealing independently. Expenses incurred for the PE, including executive and general administrative expenses, are allowable deductions under the taxing State's laws; purchases of goods do not by themselves create attributable profits. The attribution method must be applied consistently year to year, and other Articles govern separately dealt with income items.
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