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.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
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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