Royalties and technical service fees: taxable in source state with a capped withholding and permanent establishment exceptions.

Royalties and technical service fees paid cross border may be taxed in the recipient's residence and also in the source state, but where the beneficial owner is resident of the other Contracting State the source tax is limited by a withholding cap. Definitions specify covered payments for rights, use of equipment, information, and managerial, technical or consultancy services. Source taxation exceptions apply when amounts are effectively connected with a permanent establishment or fixed base, in which case business profits or independent personal services rules govern. Related party excess payments are limited to arm's length amounts for the Article's benefits.

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