Royalties and technical service fees: source state may tax payments to nonresidents, subject to beneficial owner and PE rules. Payments characterized as royalties or fees for technical services arising in one Contracting State and paid to a resident of the other may be taxed both in the residence State and in the source State; where the recipient is the beneficial owner source taxation is subject to a capped rate. Royalties include payments for use of intellectual property, equipment and technical information; fees for technical services cover non employee managerial, technical or consultancy services and provision of personnel.