Business profits: taxing rights rest with the enterprise's residence unless attributable to a permanent establishment in the source state. Business profits are taxable in the enterprise's residence State unless the enterprise carries on business through a permanent establishment in the other Contracting State; only profits attributable to that permanent establishment may be taxed there. Attribution follows the principle that the permanent establishment is treated as a distinct and separate enterprise under similar conditions, with reasonable estimation allowed where precise determination is impracticable. Deductible expenses include those incurred for the permanent establishment's business, subject to domestic disallowance rules, and mere purchases by the permanent establishment do not create attributable profits.
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: taxing rights rest with the enterprise's residence unless attributable to a permanent establishment in the source state.
Business profits are taxable in the enterprise's residence State unless the enterprise carries on business through a permanent establishment in the other Contracting State; only profits attributable to that permanent establishment may be taxed there. Attribution follows the principle that the permanent establishment is treated as a distinct and separate enterprise under similar conditions, with reasonable estimation allowed where precise determination is impracticable. Deductible expenses include those incurred for the permanent establishment's business, subject to domestic disallowance rules, and mere purchases by the permanent establishment do not create attributable profits.
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