Royalties taxation under treaty limits source-state withholding; permanent establishment connection shifts taxation; related-party pricing adjusted. Royalties under the Thailand DTAA may be taxed in the recipient's State, while the State of source may also tax such royalties subject to a withholding tax cap. The Article defines royalties broadly to include payments for the use or right to use intellectual property, industrial equipment, and technical information. If the recipient carries on business through a permanent establishment or fixed base and the royalties are effectively connected to it, domestic business or service provisions apply instead. The Article also deems source based on the payer or its permanent establishment and requires adjustment for related-party overpricing.
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 under the Thailand DTAA may be taxed in the recipient's State, while the State of source may also tax such royalties subject to a withholding tax cap. The Article defines royalties broadly to include payments for the use or right to use intellectual property, industrial equipment, and technical information. If the recipient carries on business through a permanent establishment or fixed base and the royalties are effectively connected to it, domestic business or service provisions apply instead. The Article also deems source based on the payer or its permanent establishment and requires adjustment for related-party overpricing.
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