Royalties and technical service fees: source taxation allowed, with limited withholding when recipient is the beneficial owner.

Royalties and technical service fees paid to a resident of the other Contracting State may be taxed in the recipient's State but may also be taxed at source with a statutory maximum withholding when the recipient is the beneficial owner. The Article sets broad definitions for "royalties" and "fees for technical services," excludes payments effectively connected with a permanent establishment or fixed base from this Article, deems source by payer residence or by liability borne by a permanent establishment or fixed base, and limits the Article's application to arm's-length amounts where special relationships inflate payments.

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