Royalties and fees for technical services: limited source country taxation when beneficial owner is resident elsewhere, with PE and transfer pricing exceptions. Article 12 permits taxation of royalties and fees for technical services by both the resident State and the source State, with the source State's tax limited when the beneficial owner is resident in the other Contracting State. It defines 'royalties' as payments for use of or rights to intellectual property and related information, and 'fees for technical services' as payments for managerial, technical or consultancy services, excluding services covered by other Articles. If the beneficial owner has a permanent establishment or fixed base in the source State and the payment is effectively connected to it, the rules on business profits or independent personal services apply. Payments exceeding arm's length amounts because of special relationships are limited to the arm's length portion for treaty treatment; the excess is taxable under domestic law.
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 fees for technical services: limited source country taxation when beneficial owner is resident elsewhere, with PE and transfer pricing exceptions.
Article 12 permits taxation of royalties and fees for technical services by both the resident State and the source State, with the source State's tax limited when the beneficial owner is resident in the other Contracting State. It defines "royalties" as payments for use of or rights to intellectual property and related information, and "fees for technical services" as payments for managerial, technical or consultancy services, excluding services covered by other Articles. If the beneficial owner has a permanent establishment or fixed base in the source State and the payment is effectively connected to it, the rules on business profits or independent personal services apply. Payments exceeding arm's length amounts because of special relationships are limited to the arm's length portion for treaty treatment; the excess is taxable under domestic law.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
AI OCR ✕
of 
TaxTMI 
TaxTMI 
