Royalties and fees for technical services: source State may tax but withholding capped for beneficial owners.

Royalties and fees for technical services arising in a Contracting State may be taxed in the residence State, while the source State may also tax them subject to a Convention cap where the recipient is the beneficial owner. "Royalties" encompass payments for use of intellectual property, equipment, and technical information; "fees for technical services" cover managerial, technical or consultancy services and personnel. The Convention excludes source taxation limits where the beneficial owner has a permanent establishment or fixed base in the source State and the payments are effectively connected with it, in which case business profits or independent personal services rules apply. Special-relationship rules confine the Convention's application to arm's-length amounts.

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