Thus, profits received by a partnership who participates in a lawyer partnership are covered by Art. 7 which deals with the taxation of enterprises. This means that the partner of the domestic partnership, regardless of whether he was personally present in the state where the foreign lawyer partnership is located, is subject to taxation with that part of his profits to be attributed to the foreign lawyer partnership in this country. The country of residence must avoid double taxation, either by application of the credit or the exemption method. It is conceivable that employees, as well as partners of the domestic office, are assigned to the foreign office or a group foreign office.
Employees receive income for their dependent personal services.
As income is only to be allocated to one person or an entity of persons, an allocation of the income paid for an employee's work cannot be allocated to the partners of the domestic office. In application of the DTC, only Art. This means that the country where the activity is exercised has the right to tax on the income paid to an employee who works in the group foreign office, except if the 183-day clause applies. According to the 183-day clause, the country of residence has the right to tax when the employee's presence in the other country does not exceed 183 days and payments are made by an employer who is not a resident of the other state and the payments are not to be borne by a permanent establishment or a fixed base which the employer maintains in the other state. If the employee exercises dependent work in the country where the foreign office is maintained, the preconditions of the 183-day clause are not met.