engaged in the same or similar activities under the same or similar con- ditions and dealing at arm's length with the enterprise of which it is a permanent establishment, and the profits so attributed shall, subject to the law of such other Contracting State, be deemed to be income from sources within such other Contracting State. (3) In determining the industrial or commercial profits from sources within one of the Contracting States of an enterprise of the other Contracting State, no profits shall be deemed to arise from the mere purchase of goods or merchandise within the former Contract- ing State by such enterprise. (4) The competent authorities of the Contracting States may lay down rules by agreement for the apportionment of industrial or com- mercial profits. ARTICLE IV Where an enterprise of one of the Contracting States, by reason of its participation in the management, control or capital of an enterprise of the other Contracting State, makes with or imposes on the latter enterprise, in their commercial or financial relations, conditions dif- ferent from those which would be made with an independent enter- prise, any profits which would, but for those conditions, have accrued to one of the enterprises, may be included in the taxable profits of that enterprise. ARnCLE V prnome from real Income of whatever nature derived from real property and interest from mortgages secured by real property shall be taxable only in the Contracting State in which the real property is situated. ARTICLE VI Income from ships Inome from shIsr (1) Income which an enterprise of one of the Contracting States derives from the operation of ships or aircraft registered in that State shall be taxable only in the State in which such ships or aircraft are registered. Income derived by such an enterprise from the opera- tion of ships or aircraft not so registered shall be subject to the provi- sions of Article III. (2) The present Convention shall be deemed to suspend, for the duration of the Convention as between the parties to which this Article applies, the provisions of the arrangement effected by ex- change of notes between the United States and the Netherlands, dated 47 Stat. 261. September 13, October 19, and November 27, 1926, providing for relief from double income taxation on shipping profits. (3) In the event that the application of this Article is extended . 1768 to the Netherland Indies in accordance with Article XXVII, the ex- change of notes between the United States and the Netherlands, dated March 8, May 23, and November 8, 1939, [P] relating to the applica- tions to the Netherland Indies of the arrangement referred to in paragraph (2) of this Article, shall be deemed to be suspended for 'Not printed. 1760 TREATIES [62 STAT.
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