Royalties taxation: source state may tax payments but limited when recipient is beneficial owner, subject to PE rules. Article 12 permits the source State to tax royalties and fees for included services paid to a resident of the other Contracting State but limits source taxation where the recipient is the beneficial owner. It defines royalties and fees for included services by reference to use of intellectual property, equipment, supplied technical knowledge, and technical or consultancy services; deems payments to arise where the payer or connected permanent establishment or fixed base is situated; and applies an arm's length adjustment where special relationships inflate payment 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 payments but limited when recipient is beneficial owner, subject to PE rules.
Article 12 permits the source State to tax royalties and fees for included services paid to a resident of the other Contracting State but limits source taxation where the recipient is the beneficial owner. It defines royalties and fees for included services by reference to use of intellectual property, equipment, supplied technical knowledge, and technical or consultancy services; deems payments to arise where the payer or connected permanent establishment or fixed base is situated; and applies an arm's length adjustment where special relationships inflate payment amounts.
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