Royalties taxation capped where beneficial owner-limited withholding and permanent-establishment exception under treaty rules apply Royalties and fees for technical services arising in one Contracting State may be taxed in the source State, but if the recipient is the beneficial owner the source State's tax on such payments is limited to a withholding ceiling of 10% of the gross amount. Definitions of 'royalties' and 'fees for technical services' specify covered payments and exclusions. The withholding cap and source taxation do not apply when the beneficial owner has a permanent establishment or fixed base to which the payments are effectively connected; in that event rules for business profits or independent personal services apply. Non-arm's-length excesses are adjusted to arm's-length amounts.
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Provisions expressly mentioned in the judgment/order text.
Royalties taxation capped where beneficial owner-limited withholding and permanent-establishment exception under treaty rules apply
Royalties and fees for technical services arising in one Contracting State may be taxed in the source State, but if the recipient is the beneficial owner the source State's tax on such payments is limited to a withholding ceiling of 10% of the gross amount. Definitions of "royalties" and "fees for technical services" specify covered payments and exclusions. The withholding cap and source taxation do not apply when the beneficial owner has a permanent establishment or fixed base to which the payments are effectively connected; in that event rules for business profits or independent personal services apply. Non-arm's-length excesses are adjusted to arm's-length amounts.
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