Technical fees taxation: source State may tax fees but residence-based beneficial ownership limits withholding to a capped rate.

Taxation of technical fees grants taxing rights to the recipient's residence State while permitting the source State to tax fees arising there, limited to ten percent of the gross amount when the beneficial owner resides in the other Contracting State. Fees for technical, managerial or consultancy services that are effectively connected with a permanent establishment or fixed base are excluded and taxed under the rules for business profits or independent personal services. Source is generally where the payer resides, or where the permanent establishment that incurred the obligation is situated; amounts exceeding arm's-length consideration remain taxable under domestic law.

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