Royalties and fees for included services: limited source-state taxation with defined withholding caps and a permanent establishment exception. The Article permits both source and residence state taxation of royalties and fees for included services but caps source-state withholding when the beneficial owner is a resident of the other Contracting State, with different ceilings by payment category and transitional rates for certain cases. It defines royalties and fees for included services, lists specific exclusions, treats payments as arising where the payer or relevant permanent establishment is situated, and excludes treaty relief where payments are effectively connected with a permanent establishment or fixed base, applying arm's-length adjustments for related-party distortions.
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 fees for included services: limited source-state taxation with defined withholding caps and a permanent establishment exception.
The Article permits both source and residence state taxation of royalties and fees for included services but caps source-state withholding when the beneficial owner is a resident of the other Contracting State, with different ceilings by payment category and transitional rates for certain cases. It defines royalties and fees for included services, lists specific exclusions, treats payments as arising where the payer or relevant permanent establishment is situated, and excludes treaty relief where payments are effectively connected with a permanent establishment or fixed base, applying arm's-length adjustments for related-party distortions.
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