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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.


Royalty Fee

(1) Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

(2) 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 Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of royalties.

(3) The term "Royalties" used in this article means remuneration of any kind paid for the use or grant of the use of a copyright in an artistic or scientific literary work, including cinematographic films or films and recordings used for radio or television programs or transmissions by satellite, cable, fiber optics or similar technologies used for transmissions to the public, magnetic tapes, floppy disks or laser disks, software, a patent, a trademark, secret trade, design, plan, formula or process, for the use or concession of the use of industrial, commercial or scientific or for information relating to experience acquired in the industrial, commercial, agricultural or scientific field (know-how).

(4) The provisions of paragraphs (1) and (2) shall not apply where the beneficial owner of the royalties, resident of a Contracting State, is exercising in the other Contracting State from which the royalties arise, that is, an industrial or commercial activity through a permanent establishment located therein, being an independent occupation by means of a fixed base therein, and that the right or the property which is the source of the royalties is in fact connected with the permanent establishment or fixed base in question. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

(5) Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that State. However, where the debtor of the royalties, whether or not he is a resident of a Contracting State has in a Contracting State a permanent establishment or a fixed base, for which the undertaking giving rise to the payment of royalties has been contracted and which shall bear the charge of these royalties, which shall be considered as coming from the State in which the permanent establishment or the fixed base is located.

(6) Where, because of the special relationship existing between the debtor and the beneficial owner or with both parties, the amount of royalties, taking into account the benefit for which they are paid, exceeds the amount the debtor and the beneficial owner in the absence of such relations, the provisions of this article apply only to the latter amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State and taking into account the other provisions of this Agreement.