Royalties and technical services taxation: source state withholding limited, with permanent establishment connection exceptions. Article 13 permits source state taxation of royalties and fees for technical services subject to specified withholding caps and categories; it defines ... Summary
Royalties and technical services taxation: source state withholding limited, with permanent establishment connection exceptions.
Article 13 permits source state taxation of royalties and fees for technical services subject to specified withholding caps and categories; it defines royalties to include payments for rights and use of intellectual property and equipment, and fees for technical services to include ancillary consultancy, provision of technical personnel, know how transfer and technical design, while excluding services tied to sales, international transport rentals, teaching, private use, and employment; payments effectively connected to a permanent establishment or fixed base fall under business profits or independent personal services rules, and related party excesses are limited to arm's length amounts.
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