Royalties and technical service fees may be taxed in source and residence states, with a capped withholding rate and PE exceptions. Royalties and fees for technical services paid to a resident of the other Contracting State may be taxed in the recipient's State, but may also be taxed in the source State where they arise; if the recipient is the beneficial owner the tax in the source State is limited to a capped withholding rate. Royalties are payments for use or right to use intellectual property, equipment or information; fees for technical services are payments for managerial, technical or consultancy services excluding employment and specified personal services. The source withholding rule does not apply where the beneficial owner has a permanent establishment or fixed base in the source State and the payments are effectively connected to it; special relationships trigger arm's length adjustments.