Royalties taxation under tax treaty: source state may tax royalties with limited withholding when recipient is beneficial owner. The treaty permits both residence and source taxation of royalties, but caps source taxation at 15 per cent where the recipient is the beneficial owner. The article defines royalties to cover payments for use of copyrights, patents, trademarks, designs, equipment, and industrial or commercial information. Royalties connected to a permanent establishment or fixed base are taxed under business profits or independent services rules instead. A special-relationship provision limits the treaty's application to arm's-length amounts, leaving excess payments 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 taxation under tax treaty: source state may tax royalties with limited withholding when recipient is beneficial owner.
The treaty permits both residence and source taxation of royalties, but caps source taxation at 15 per cent where the recipient is the beneficial owner. The article defines royalties to cover payments for use of copyrights, patents, trademarks, designs, equipment, and industrial or commercial information. Royalties connected to a permanent establishment or fixed base are taxed under business profits or independent services rules instead. A special-relationship provision limits the treaty's application to arm's-length amounts, leaving excess payments taxable under domestic law.
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