Taxation of royalties and technical service fees: source state may tax with limited withholding; exceptions for permanent establishments. Royalties and fees for technical services may be taxed in the recipient's State and in the source State, but tax in the source State is limited where the beneficial owner is a resident of the other Contracting State. Royalties include payments for use of intellectual property and technical information; fees for technical services cover managerial, technical, consultancy or assistance payments not covered elsewhere. If the beneficial owner has a permanent establishment or fixed base in the source State and the right or property is effectively connected thereto, business profits or independent personal services rules apply. Amounts exceeding arm's length due to special relationships are disregarded for treaty application and remain taxable under domestic law.
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 tax with limited withholding; exceptions for permanent establishments.
Royalties and fees for technical services may be taxed in the recipient's State and in the source State, but tax in the source State is limited where the beneficial owner is a resident of the other Contracting State. Royalties include payments for use of intellectual property and technical information; fees for technical services cover managerial, technical, consultancy or assistance payments not covered elsewhere. If the beneficial owner has a permanent establishment or fixed base in the source State and the right or property is effectively connected thereto, business profits or independent personal services rules apply. Amounts exceeding arm's length due to special relationships are disregarded for treaty application and remain taxable under domestic law.
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