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(1) The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enter- prise carries 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 permanent establishment.
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(2} Where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, 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 conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.
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(3) In the determination of the profits of a permanent establishment, there shall be allowed as deductions ex- penses which are incurred for the purposes of the per- manent establishment including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere.
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(4) Nothing in paragraph (2) shall preclude a Contract- ing State from determining the profits to be attributed to a permanent establishment on the basis of an ap- portionment of the total profits of the enterprise to its various parts; the method of apportionment adopted shall, however, be such that the result shall be in accord- ance with the principles laid down in this Article.
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(5) No profits shall be attributed to a permanent estab- lishment by reason of the mere purchase by that per- manent establishment 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 Agree- ment, then the provisions of those Articles shall not be affected by the provisions of this Article.