Royalties and fees for technical services: source State taxation limited when recipient is beneficial owner; treaty rules allocate rights. Royalties and fees for technical services arising in one Contracting State and paid to a resident of the other may be taxed in the residence State, while the source State may also tax them subject to specified ceilings where the recipient is the beneficial owner. The Article defines 'royalties' to include payments for use of intellectual property, equipment, or industrial information and defines 'fees for technical services' as payments for technical or consultancy services (excluding employment and certain independent personal services). If such payments are effectively connected with a permanent establishment or fixed base in the source State, the provisions on business profits or independent personal services apply. Amounts in excess of arm's length consideration due to special relationships are excluded from treaty limits and remain taxable under domestic law.