Royalties taxation: source state may tax royalties subject to a capped rate while residence state may also tax. Royalties arising in one Contracting State and paid to a resident of the other may be taxed in the recipient's State, while the State in which the royalties arise may also tax those payments subject to a source tax cap. The Article defines royalties to include payments for the use of copyrights, patents, trade marks, designs, secret formulas, industrial equipment and related information. The source tax limitation does not apply if the recipient carries on business in the source State through a permanent establishment or fixed base and the royalties are effectively connected with that establishment. Special relationship adjustments limit the Convention's application to arm's length amounts.
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: source state may tax royalties subject to a capped rate while residence state may also tax.
Royalties arising in one Contracting State and paid to a resident of the other may be taxed in the recipient's State, while the State in which the royalties arise may also tax those payments subject to a source tax cap. The Article defines royalties to include payments for the use of copyrights, patents, trade marks, designs, secret formulas, industrial equipment and related information. The source tax limitation does not apply if the recipient carries on business in the source State through a permanent establishment or fixed base and the royalties are effectively connected with that establishment. Special relationship adjustments limit the Convention's application to arm's length amounts.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
Join Channel
TaxTMI 
