Taxation of Royalties and Technical Service Fees: source-state may impose limited withholding rate; permanent establishment exception applies. Royalties and fees for technical services paid to a resident of the other Contracting State may be taxed in the recipient's State, but the source State may also tax them subject to a limited withholding rate where the beneficial owner is resident of the other State. Definitions specify intellectual property and payments for managerial, technical or consultancy services. The limitation does not apply if the beneficial owner has a permanent establishment or fixed base in the source State and the income is effectively connected; in such cases business profits or independent services rules govern. Special-relationship adjustments limit treaty application to arm's-length amounts.
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.
Taxation of Royalties and Technical Service Fees: source-state may impose limited withholding rate; permanent establishment exception applies.
Royalties and fees for technical services paid to a resident of the other Contracting State may be taxed in the recipient's State, but the source State may also tax them subject to a limited withholding rate where the beneficial owner is resident of the other State. Definitions specify intellectual property and payments for managerial, technical or consultancy services. The limitation does not apply if the beneficial owner has a permanent establishment or fixed base in the source State and the income is effectively connected; in such cases business profits or independent services rules govern. Special-relationship adjustments limit treaty application to arm's-length amounts.
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