Royalties may be taxed at source with a limited withholding rate when the recipient is the beneficial owner.

Royalties arising in a Contracting State may be taxed in the recipient's resident State but may also be taxed in the source State; if the recipient is the beneficial owner, the source State's tax on gross royalties shall not exceed ten per cent. Royalties are broadly defined to include payments for use of copyrights, films, patents, trade marks, designs, processes, equipment, and know how. If the beneficial owner carries on business through a permanent establishment or fixed base in the source State and the rights are effectively connected, Article 7 or Article 15 applies. Special relationships that inflate royalties trigger arm's length adjustment, leaving excess taxable under domestic law.

---

---

---