Royalties and technical service fees: source taxation permitted but limited; connected business payments follow PE or fixed base rules. Article 12 allows royalties and fees for technical services arising in one Contracting State and paid to a resident of the other to be taxed in the recipient's State, while permitting the source State to tax them under its laws subject to a tax limit where the recipient is the beneficial owner. It defines 'royalties' and 'fees for technical services,' excludes payments connected with a permanent establishment or fixed base (in which case business profits or independent personal services rules apply), sets rules for when payments are deemed to arise, and limits application where related party pricing inflates amounts.
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 taxation permitted but limited; connected business payments follow PE or fixed base rules.
Article 12 allows royalties and fees for technical services arising in one Contracting State and paid to a resident of the other to be taxed in the recipient's State, while permitting the source State to tax them under its laws subject to a tax limit where the recipient is the beneficial owner. It defines "royalties" and "fees for technical services," excludes payments connected with a permanent establishment or fixed base (in which case business profits or independent personal services rules apply), sets rules for when payments are deemed to arise, and limits application where related party pricing inflates amounts.
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