Royalties and technical service fees: source taxation allowed, residence benefits limit withholding where beneficial owner resident.

Royalties and fees for technical services arising in one Contracting State and paid to a resident of the other State may be taxed in the resident State, while the source State may also tax such payments subject to a reduced withholding cap for beneficial owners who are residents. The Article defines royalties and fees for technical services, excludes services covered elsewhere, disapplies withholding when amounts are effectively connected with a permanent establishment or fixed base, provides deemed-source rules tied to the payer or its permanent establishment, and limits taxation to arm's-length amounts where special relationships inflate payments.

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