Business profits taxation: only profits attributable to a permanent establishment may be taxed in the host State. Business profits of an enterprise are taxable only in its State of residence unless it carries on business in the other State through a permanent establishment, in which case only profits attributable to that permanent establishment may be taxed there. Attributed profits are to be determined as if the permanent establishment were a distinct and separate enterprise operating under similar conditions and dealing independently. Deductions are allowed for expenses incurred for the permanent establishment, subject to the tax law of the State where it is situated. Profits are not attributed by reason only of purchases, and the attribution method should be consistent year to year.
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 taxation: only profits attributable to a permanent establishment may be taxed in the host State.
Business profits of an enterprise are taxable only in its State of residence unless it carries on business in the other State through a permanent establishment, in which case only profits attributable to that permanent establishment may be taxed there. Attributed profits are to be determined as if the permanent establishment were a distinct and separate enterprise operating under similar conditions and dealing independently. Deductions are allowed for expenses incurred for the permanent establishment, subject to the tax law of the State where it is situated. Profits are not attributed by reason only of purchases, and the attribution method should be consistent year to year.
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