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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 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 in the other Contracting State, the tax so charged shall not exceed 5 per cent of the gross amount of the royalties. The competent authorities in both Contracting States shall mutually agree on the procedures required to apply such per cent.

(3) Notwithstanding the provisions of Articles (1) and (2) of this Article, the royalties paid to the governments, municipalities or financial entities of either States shall be exempted.

(4) The term "royalties" shall mean the payments of any kind received as a consideration for the use of, or the right to use, copyright of any literary, artistic or scientific copyright, including film or video tapes, radio and TV recordings, patents, trademarks, designs, models, plans, secret formula or process, as well as the payments paid for the use of industrial, commercial, agricultural or scientific equipments and amounts paid for the provision of information on industrial, commercial or scientific experience.

(5) The provisions of paragraphs (1) and (2) of this Article shall not be 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, through a permanent establishment situated therein or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

(6) Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, 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 in connection with which the obligation to pay the royalties arose, and such royalties are connected with such permanent establishment or fixed base, 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 either between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right 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 last-mentioned 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.