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(1) The profits of an enterprise of a Con- tracting State shall be taxable only in that State unless the enterprise carries on or has carried on business in the other Con- tracting State through a permanent estab- lishment situated therein. If the enterprise carries on or has carried on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that per- manent establishment.
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(2) Subject to the provisions of para- graph 3, where an enterprise of a Contract- ing State carries on or has carried on busi- ness in the other Contracting State through a permanent establishment situated there- in, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar condi- tions and dealing wholly independently with the enterprise of which it is a perma- nent establishment.
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(3) In determining the profits of a perma- nent establishment, there shall be allowed those deductible expenses which are incurred for the purposes of the permanent establishment including executive and general administrative expenses, whether incurred in the State in which the perma- nent establishment is situated or else- where.
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(4) Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establish- ment on the basis of an apportionment of the total profits of the enterprise to its vari- ous parts, nothing in paragraph 2 shall pre- clude that Contracting State from deter- mining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article.
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(5) No profits shall be attributed to a per- manent establishment by reason of the mere purchase by that permanent estab- lishment of goods or merchandise for the enterprise.
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(6) For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.
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(7) Where profits include items of income which are dealt with separately in other Articles of this Agreement, then, the provi- sions of those Articles shall not be affected by the provisions of this Article.