- (a) an enterprise of a Contracting State, directly or indirectly, participates in the management, control or capital of an enterprise of the other Contracting State, or
- (b) the same persons, directly or indirectly, participate in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State,
and in either case, conditions are imposed on or agreed between the two enterprises in their commercial or financial relations, which differ from those that would have been agreed between independent enterprises, then any profits which would have accrued to one of the enterprises, but for those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.
(2) Where a Contracting State includes in the profits of an enterprise of that State-and taxes accordingly-profits on which an enterprise of the other Contracting State has been taxed in that other State, and the profits so included are the profits which would have accrued to the enterprise of the first-mentioned State if the conditions agreed between the two enterprises had been those which would have been agreed between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be given to the other provisions of this Convention.
(3) A Contracting State shall not adjust the profits of an enterprise in the circumstances referred to in paragraph 1 after the expiration of the time limits referred to under its domestic laws and, in any case, after five years, in the case of Egypt, and after fifteen year in the case of Syria from the end of the year in which the profits which would be subject to an adjustment would have been realized.
(4) The provisions of paragraphs 2 and 3 shall not apply to cases of tax evasion or willful default and negligence.