Fees for technical services: source-state tax limited when beneficial owner is resident; exceptions for permanent establishments.

Fees for technical services may be taxed in the recipient's State, while the State where they arise may also tax them subject to a withholding tax limitation when the beneficial owner is resident of the other State. The term covers managerial, technical or consultancy services (including personnel) but excludes services under Articles 15 and 16. Exceptions apply where the beneficial owner operates through a permanent establishment or fixed base and the fees are effectively connected; in such cases rules on business profits or independent personal services govern. Deemed source rules and special-relationship arm's-length adjustments also apply.

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