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Business profits allocation: taxable in the resident state unless attributable to a permanent establishment in the other state. Article 7 allocates taxing rights over business profits to the State of the enterprise unless profits are attributable to a permanent establishment in the other State; such profits are determined by treating the permanent establishment as a distinct and separate enterprise or by proportionate attribution where it contributes to contracts. Deductions are allowed for expenses incurred for the permanent establishment, including executive and administrative costs, subject to domestic limitations, while specified payments between head office and permanent establishment (royalties, fees, commissions, management charges, and generally interest) are excluded from deduction unless reimbursements of actual expenses or excepted for banking enterprises.
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 allocation: taxable in the resident state unless attributable to a permanent establishment in the other state.
Article 7 allocates taxing rights over business profits to the State of the enterprise unless profits are attributable to a permanent establishment in the other State; such profits are determined by treating the permanent establishment as a distinct and separate enterprise or by proportionate attribution where it contributes to contracts. Deductions are allowed for expenses incurred for the permanent establishment, including executive and administrative costs, subject to domestic limitations, while specified payments between head office and permanent establishment (royalties, fees, commissions, management charges, and generally interest) are excluded from deduction unless reimbursements of actual expenses or excepted for banking enterprises.
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