Royalties and technical service fees: treaty limits source-state taxing rights and provides withholding rules and connection tests. Royalties and fees for technical services arising in one Contracting State and paid to a resident of the other may be taxed in the recipient's State, while the source State may also tax them subject to a capped rate when the recipient is the beneficial owner. The Article defines royalties and fees for technical services, excludes certain services covered elsewhere, treats income as arising where the payer or a related permanent establishment is situated, displaces source taxation when income is effectively connected with a permanent establishment or fixed base, and permits adjustments where related party relationships inflate amounts.
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Royalties and technical service fees: treaty limits source-state taxing rights and provides withholding rules and connection tests.
Royalties and fees for technical services arising in one Contracting State and paid to a resident of the other may be taxed in the recipient's State, while the source State may also tax them subject to a capped rate when the recipient is the beneficial owner. The Article defines royalties and fees for technical services, excludes certain services covered elsewhere, treats income as arising where the payer or a related permanent establishment is situated, displaces source taxation when income is effectively connected with a permanent establishment or fixed base, and permits adjustments where related party relationships inflate amounts.
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