Place of effective management governs taxation of international shipping and air transport profits, with limited taxing right where operations occur. Profits from operating ships or aircraft in international traffic are taxable only in the Contracting State of the enterprise's place of effective management, except that profits from ship operations may be taxed in the State where operations occur subject to a cap of fifty per cent of the tax otherwise chargeable; these rules also apply to pools, joint businesses, and international operating agencies. Interest connected with such operations is treated as operational income, and if a shipping enterprise's place of effective management is aboard a ship it is deemed situated in the State of the ship's home harbour or, absent that, the operator's State of residence.
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Provisions expressly mentioned in the judgment/order text.
Place of effective management governs taxation of international shipping and air transport profits, with limited taxing right where operations occur.
Profits from operating ships or aircraft in international traffic are taxable only in the Contracting State of the enterprise's place of effective management, except that profits from ship operations may be taxed in the State where operations occur subject to a cap of fifty per cent of the tax otherwise chargeable; these rules also apply to pools, joint businesses, and international operating agencies. Interest connected with such operations is treated as operational income, and if a shipping enterprise's place of effective management is aboard a ship it is deemed situated in the State of the ship's home harbour or, absent that, the operator's State of residence.
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