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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.



(1) Royalties arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable in the other Contracting State.

(2) However, such royalties may also be taxable in the Contracting State in which they arise and according to the laws of that State. But if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 10 percent of the gross amount of royalties. Moreover, the competent authorities of both Contracting States shall jointly agree on actions to enforce the said limit.

(3) Notwithstanding the provisions of Paragraphs (1) and (2) of this Article, the royalties payable to the Government of a Contracting State, its local governments, the UAE Central Bank, Abu Dhabi Fund for Development, Abu Dhabi Investment Authority, Abu Dhabi Investment Company, Dubai Company for Investment or any other government institution, and the royalties payable, as for the Kingdom of Morocco, to Morocco Bank, Mass Processing Fund, the Development Agency of Northern Territories or any Moroccan government institution, such royalties shall not be taxable in either State, and these provisions shall apply to loans guaranteed by the government of a Contracting State, its local governments or financial institutions.

(4) The term "Royalties" as used in this Article means payments of any kind received as a consideration of the use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematograph films, tapes and recordings for radio or television broadcasting, patent rights, trademark, factory mark, drawing, model and confidential formula or process, as well as payments made against granting the right to use industrial, commercial, farming or scientific equipment in addition to the payments paid for the provision of information related to industrial, commercial or scientific experiences.

(5) The provisions of Paragraph (1) of this Article shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, whether such business is industrial or commercial and carried out through a permanent establishment located therein, or performs in that other State independent personal services through a fixed base located therein, and the right or property in respect of which the royalties are paid is effectively connected thereto. In such case, the provisions of Article 7 or Article 14 of this Convention, as the case may be, shall apply.

(6) The royalties shall be deemed to arise in a Contracting State, if their payer is the resident of that State, a political division, a local community or a resident thereof. Where, however, if the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base with which the liability to pay such royalties was incurred, then, such royalties shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.

(7) Where, by reason of a special relationship between the payer and the beneficial owner of the royalties or between both of them and some other person, the amount of royalties, having regard to the use, right of use or information 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 such special relationship, the provisions of this Article shall apply only to the latter amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.