§ PDF page 6
(1) The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on busi- ness in the other Contracting State through a permanent estab- lishment situated therein. If the enterprise 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 perma- nent establishment.
§ PDF page 6
(2) Subject to the provisions of paragraph 3, where an enter- prise 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 condi- tions and dealing wholly independently with the enterprise of which it is a permanent establishment.
§ PDF page 6
(3) In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the Contracting State in which the perma- nent establishment is situated or elsewhere.
§ PDF page 6 PDF page 7
(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 various parts, nothing in paragraph 2 shall pre- clude that Contracting State from determining 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.
§ PDF page 7
(5) No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.
§ PDF page 7
(6) For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be deter- mined by the same method year by year unless there is good and sufficient reason to the contrary.
§ PDF page 7
(7) Where profits include items of income or capital gains which are dealt with separately in other Articles of this Conven- tion, then the provisions of those Articles shall not be affected by the provisions of this Article.