Taxation of royalties and technical fees: source State may tax, limited where beneficial owner is resident of the other State. Taxation of royalties and fees for technical services is allocated between the State of residence and the source State, with the source State permitted to tax such payments but subject to a reduced charge when the beneficial owner is resident of the other Contracting State. The Article defines royalties and fees for technical services, excludes payments effectively connected with a permanent establishment or fixed base (which are governed by business profits or independent services provisions), prescribes source rules based on the payer or the situs of the permanent establishment or use/performance, and limits treaty application to arm's-length amounts where a special relationship inflates payments.