Royalties withholding limit: source State may tax but reduced rate applies where recipient is treaty resident. Royalties may be taxed in the recipient's State, but the source State may also tax them subject to a withholding limit when the beneficial owner is resident in the other Contracting State. The Article broadly defines royalties to include payments for use of copyrights, patents, trademarks, designs, equipment and technical information. If the beneficial owner carries on business in the source State through a permanent establishment and the royalties are effectively connected thereto, Article 7 applies. Related party excesses are limited to arm's length amounts for treaty purposes.
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 withholding limit: source State may tax but reduced rate applies where recipient is treaty resident.
Royalties may be taxed in the recipient's State, but the source State may also tax them subject to a withholding limit when the beneficial owner is resident in the other Contracting State. The Article broadly defines royalties to include payments for use of copyrights, patents, trademarks, designs, equipment and technical information. If the beneficial owner carries on business in the source State through a permanent establishment and the royalties are effectively connected thereto, Article 7 applies. Related party excesses are limited to arm's length amounts for treaty purposes.
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