Code to register custom posttype and custom taxonomy with custom permalink structure.

wp_custom_permalink.php

/* Custom Post Types */
function theme_post_types(){
  register_post_type('product', array(
    'labels' => array(
      'name' => __('Products'),
      'singular_name' => __('Product'),
      'menu_name' => __('Products'),
      'add_new_item' => __('Add New Product'),
      'edit_item' => __('Edit Product'),
      'new_item' => __('Add New Product')
    ),
    'public' => true,
    'has_archive' => false,
    '_builtin' => false,
    'rewrite' => array("slug" => "product","with_front'=>false"),
    'supports' => array('title', 'editor', 'thumbnail', 'excerpt' ),
    'taxonomies' => array('post_tag'),
    'rewrite' => array('slug' => 'product/%product-category%','with_front'=>false)
    )
  );
}

/* Custom Taxonomies */
function theme_taxonomies(){

    register_taxonomy(
      'product-category',
      array(
        'product'
      ),
      array(
        'hierarchical' => true,
        'label' => 'Product Categories',
        'query_var' => true,
        'public' => true,
        'rewrite' => array(
          'hierarchical' => true
        )
      )
    );
}

add_filter('post_link', 'product_permalink', 1, 3);
add_filter('post_type_link', 'product_permalink', 1, 3);

function product_permalink($permalink, $post_id, $leavename) {
    if (strpos($permalink, '%product-category%') === FALSE) return $permalink;
        // Get post
        $post = get_post($post_id);
        if (!$post) return $permalink;

        // Get taxonomy terms
        $terms = wp_get_object_terms($post->ID, 'product-category');
        if (!is_wp_error($terms) && !empty($terms) && is_object($terms[0]))
        	$taxonomy_slug = $terms[0]->slug;
        else $taxonomy_slug = 'uncategorized';

    return str_replace('%product-category%', $taxonomy_slug, $permalink);
}