Royalties and technical service fees: source state may tax payments, with reduced withholding where recipient is beneficial owner. Article 12 permits taxation of royalties and fees for technical services by the State of residence and by the State where such payments arise; where the recipient is the beneficial owner a reduced withholding applies. It defines royalties to include payments for use of intellectual property and equipment, and fees for technical services to include managerial, technical or consultancy services (excluding certain other Articles). Income effectively connected to a permanent establishment or fixed base is taxed under Articles 7 or 14, and special relationship rules limit taxation to arm's length amounts, leaving excess 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 and technical service fees: source state may tax payments, with reduced withholding where recipient is beneficial owner.
Article 12 permits taxation of royalties and fees for technical services by the State of residence and by the State where such payments arise; where the recipient is the beneficial owner a reduced withholding applies. It defines royalties to include payments for use of intellectual property and equipment, and fees for technical services to include managerial, technical or consultancy services (excluding certain other Articles). Income effectively connected to a permanent establishment or fixed base is taxed under Articles 7 or 14, and special relationship rules limit taxation to arm's length amounts, leaving excess taxable under domestic law.
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