Application of different approaches to attribution:manufactures Ltd which is resident in Eurpoa has a branch in Australis. The branch pays charge to head office covering the following:

(a) interest at 10% on a loan of part of the branchs capital by headoffice;

(b) Manufactures has total external interest costs of $5,000,000 and it allocates in its financial accounts in accordance with Europa tax law a pro rata share of $500,000 of this interest to the branch in Australis based on its worldwide operations; (

c) royalties paid by the branch on a licence of intellectual property by head office to the branch;

(d) fee for accounting services provided by head office (including a markup on cost);

(e) prorated share of other head office expenses (including the salary of Manufactures CEO);

(f) $10 per item as cost of goods sold (the cost of manufacture on an absorption cost basis at head office being $7.50).

(g) a foreign exchange loss made on reimbursement by the PE of the head office for the cost in USD of trading stock purchased by head office for the PE

To what extent is deduction of these expenses required, permitted or prohibited under tax treaties? Does it make a difference if the branch makes a loss rather than a profit?