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Business profits attribution to permanent establishment determines taxable profits in the source state only to the extent attributable to the PE. Profits of an enterprise are taxable only in its State unless business is carried on in the other State through a permanent establishment; if so, only profits attributable to that permanent establishment may be taxed there. Attributed profits are determined by treating the permanent establishment as a distinct and separate enterprise under similar conditions dealing independently, allowing deductions for expenses incurred for the permanent establishment subject to host State limitations. Customary apportionment may be applied if consistent with these principles, no attribution arises from mere purchases, the method should be consistent year by year, and this Article does not affect income treated separately elsewhere.
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 attribution to permanent establishment determines taxable profits in the source state only to the extent attributable to the PE.
Profits of an enterprise are taxable only in its State unless business is carried on in the other State through a permanent establishment; if so, only profits attributable to that permanent establishment may be taxed there. Attributed profits are determined by treating the permanent establishment as a distinct and separate enterprise under similar conditions dealing independently, allowing deductions for expenses incurred for the permanent establishment subject to host State limitations. Customary apportionment may be applied if consistent with these principles, no attribution arises from mere purchases, the method should be consistent year by year, and this Article does not affect income treated separately elsewhere.
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