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Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.




  • (a) Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
  • (b) However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the beneficial owner is a resident of the other State, the tax so charged may not exceed 5 percent of the gross amount of the royalties.
  • (c) Notwithstanding the provisions of sub-paragraphs (a) and (b), royalties arising in one State and paid to a resident of the other State for the use or right to use a copyright or similar rights (excluding royalties on software, motion pictures and other sound or picture recordings) shall be taxable only in that other State if such resident is their beneficial owner.

(2) The term "royalties" as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, including software, cinematograph films and other recordings of sound or pictures, any patent, trademark, design or model, plan, secret formula or process as well as for the use of, or the right to use, any industrial, commercial or scientific equipment or for any information related with experience acquired in the field of industry, commerce, or science (know-how).

(3) The provisions of paragraph (1) shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on a business activity in the other Contracting State in which the royalties arise, through a permanent establishment situated therein and the right or property in respect of which the royalties are paid is effectively connected therewith. In such case the provisions of Article 7 shall apply.

(4) The royalties are deemed to arise in a Contracting State in case the payer is a resident of that State. In case the payer of the royalties, whether a resident of a Contracting State or not, however, has a permanent establishment in a Contracting State for which the contract giving rise to the payment of the royalties has been entered and which as such incurs the charge thereof, such royalties shall be deemed to arise in the State in which the permanent establishment is situated.

(5) Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some third parties, the amount of the royalties, having regard to the service for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of similar relationships, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable in accordance with the laws of each Contracting State, due regard being had to the other provisions of this Convention.

(6) The provisions of this Article shall not apply if the main purpose or one of the main purposes of any person concerned with the creation or assignment of rights in respect of which royalties are paid, is to take advantage of this Article by means of that creation or assignment.