Royalties and technical service fees: source-state taxation permitted but limited; connection to permanent establishment alters treatment.

Article 12 permits both residence-State and source-State taxation of royalties and fees for technical services, but limits source-State withholding when the beneficial owner is resident in the other Contracting State. It defines royalties and fees for technical services, excludes application where the beneficial owner has a permanent establishment or fixed base in the source State and the payments are effectively connected with that presence, deems when such payments arise, and requires arm's-length adjustment where special relationships affect the amount.

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