Withholding tax cap on royalties and fees for technical services when recipient is beneficial owner, subject to PE connection rules. Royalties and fees for technical services may be taxed in the recipient's State, while the source State may also tax them subject to a withholding cap when the recipient is the beneficial owner. 'Royalties' covers payments for use of intellectual property, equipment or industrial information; 'fees for technical services' covers managerial, technical or consultancy services including provision of personnel. The withholding rule does not apply where the beneficial owner has a permanent establishment or fixed base in the source State and the payments are effectively connected with that nexus. Payments incurred by a permanent establishment are deemed to arise in the State where that nexus is situated. Related-party excess amounts are limited to arm's length values, with the excess taxable under domestic law.