Royalties tax limitation: source-state taxation constrained where recipient is beneficial owner, with PE connection exceptions.

Royalties paid to a resident may be taxed in the recipient's State and in the source State subject to a treaty ceiling when the recipient is the beneficial owner. The Article broadly defines royalties, excludes natural resource exploitation payments, treats royalties as arising where the payer or a connected permanent establishment or fixed base is situated, displaces source state treaty relief where royalties are effectively connected to a permanent establishment or fixed base, and limits treaty protection to arm's length amounts in related party transactions.

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