Royalties taxation: source-state withholding limited when the beneficial owner is resident, subject to permanent establishment connection. Article 12 permits taxation of royalties both in the source State and in the resident State of the beneficial owner, with a reduced withholding tax when the beneficial owner is resident in the other Contracting State. It defines royalties to include payments for use or rights to use intellectual property, equipment, and technical information. Royalties effectively connected to a permanent establishment or fixed base are taxed under business profits or independent personal services provisions. Transactions between related parties are limited to arm's-length amounts for the Article's application.