Permanent establishment taxation permits a State to tax profits attributable to the PE under arm's length attribution rules. Profits are taxable in the State of residence except where an enterprise carries on business in the other Contracting State through a permanent establishment; that State may tax only profits attributable to the permanent establishment. Attribution treats the permanent establishment as a distinct and separate enterprise dealing independently under similar conditions, allows deductions for expenses incurred for the permanent establishment in line with that State's tax law limitations, excludes mere purchases from creating attributable profits, requires consistent application of the attribution method year to year, and leaves income governed by other Articles unaffected.
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Provisions expressly mentioned in the judgment/order text.
Permanent establishment taxation permits a State to tax profits attributable to the PE under arm's length attribution rules.
Profits are taxable in the State of residence except where an enterprise carries on business in the other Contracting State through a permanent establishment; that State may tax only profits attributable to the permanent establishment. Attribution treats the permanent establishment as a distinct and separate enterprise dealing independently under similar conditions, allows deductions for expenses incurred for the permanent establishment in line with that State's tax law limitations, excludes mere purchases from creating attributable profits, requires consistent application of the attribution method year to year, and leaves income governed by other Articles unaffected.
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