Permanent establishment rules limit taxation to profits attributable to the PE, guiding profit attribution and allowable deductions.

Profits of an enterprise are taxable only in the State of residence unless business is carried on in the other State through a permanent establishment, in which case only profits attributable to that PE may be taxed there. Profits should be attributed as if the PE were a distinct and separate enterprise, with deductions allowed for expenses incurred for the PE's business, and apportionment methods permitted where customary, provided results align with the Article's principles.

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