Taxation of royalties and technical service fees: source state may tax, subject to treaty cap and PE exceptions.

Article 13 permits both the recipient's State and the source State to tax royalties and fees for technical services, with source taxation subject to a treaty withholding cap when the recipient is the beneficial owner. It defines royalties and fees for technical services, excludes payments effectively connected with a permanent establishment or fixed base (which are taxed under business profits or independent personal services rules), deems source of payment in prescribed circumstances, and limits treaty application where related-party pricing exceeds arm's-length amounts.

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