Business profits: taxation restricted to resident State unless attributable profits arise from a permanent establishment in the other State. Profits of an enterprise are taxable only in its resident State 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. Where sales or services mirror those of the permanent establishment, profits may be attributed to it unless shown otherwise. Attributable profits should reflect what the establishment would earn as a separate enterprise; estimation is allowed if accurate determination is impracticable. Deductions for expenses incurred for the establishment's business are permitted subject to domestic disallowances, and purchases for export to the head office do not, by themselves, 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: taxation restricted to resident State unless attributable profits arise from a permanent establishment in the other State.
Profits of an enterprise are taxable only in its resident State 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. Where sales or services mirror those of the permanent establishment, profits may be attributed to it unless shown otherwise. Attributable profits should reflect what the establishment would earn as a separate enterprise; estimation is allowed if accurate determination is impracticable. Deductions for expenses incurred for the establishment's business are permitted subject to domestic disallowances, and purchases for export to the head office do not, by themselves, create attributable profits.
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