Royalties and technical service fees: source-state taxation permitted with a limited withholding rate and PE connection exceptions. Article 12 permits source state taxation of royalties and fees for technical services paid to a resident of the other Contracting State, subject to a limited withholding tax when the beneficial owner is resident in the other State. It defines royalties and fees for technical services, excludes amounts connected with aircraft and ships, and provides that payments effectively connected to a permanent establishment or fixed base are taxed under the provisions for business profits or independent personal services. An arm's length rule limits application where related party pricing inflates payments.
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.
Royalties and technical service fees: source-state taxation permitted with a limited withholding rate and PE connection exceptions.
Article 12 permits source state taxation of royalties and fees for technical services paid to a resident of the other Contracting State, subject to a limited withholding tax when the beneficial owner is resident in the other State. It defines royalties and fees for technical services, excludes amounts connected with aircraft and ships, and provides that payments effectively connected to a permanent establishment or fixed base are taxed under the provisions for business profits or independent personal services. An arm's length rule limits application where related party pricing inflates payments.
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