Most favoured treatment: apply more favourable domestic tax law to treaty residents; royalty reductions with third state pacts follow treaty. Protocol to the India-Nepal tax agreement provides that if a Contracting State's domestic law is more favourable to a resident of the other State than the treaty, the domestic law applies; and that if Nepal adopts with a third State a convention or protocol limiting source taxation on royalties more narrowly or at a lower rate, that narrower scope or lower rate will apply under this Agreement from the date that third-State instrument enters into force.