Royalties taxation capped at source with definitions, exclusions, and permanent establishment connectivity determining treatment.

Royalties to which a resident of the other Contracting State is beneficially entitled may be taxed in that resident's State and also in the source State, but source taxation is limited by specified maximum rates on the gross amount. The Article defines royalties broadly to include payments for use of intellectual property, equipment, technical knowledge and ancillary technical or consultancy services, while excluding defined service categories and treating royalties connected with a permanent establishment or fixed base as governed by the provisions on business profits or independent personal services.

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