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ARTICLE 13

Royalties

(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, royalties paid by a company which is a resident of a Contracting State may also be taxed in that Contracting State according to the laws of that Contracting 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 the royalties.

(3) Notwithstanding the provisions of paragraphs 1 and 2 of this Article interest arising in a Contracting State shall be exempt from tax in that Contracting State provided it is derived and beneficially owned by:

  • (a) In the case of the Slovak Republic:
    • (i) the Government of the Slovak Republic,
    • (ii) the local authorities,
    • (iii) Narodna banka Slovenska (the National Bank of Slovakia),
    • (iv) Eximbanka SR (Export-import Bank of the Slovak Republic),
    • (v) Slovenska zarucna a rozvojova banka, a.s. (Slovak Guarantee and Development Bank),
    • (vi) Agentura pre riadenie dlhu a likvidity (Debt and Liquidity Management Agency),
  • (b) In case of United Arab Emirates;
    • (i) Central Bank of the United Arab Emirates,
    • (ii) Emirates Investment Authority,
    • (iii) Abu Dhabi Investment Authority,
    • (iv) International Petroleum Investment Company,
    • (v) Abu Dhabi Investment Council,
    • (vi) Investment Corporation of Dubai,
    • (vii) Abu Dhabi National Energy Company (TAQA),
    • (viii) Mubadala Development Company,
    • (ix) the Abu Dhabi Retirement Pensions and Benefits Fund,
    • (x) the General Pension and Social Security Authority,
  • and any other institutions that shall be agreed between the two Contracting States through exchange of letters.

(4) 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 cinematograph films, and films or tapes for radio or television broadcasting and other means of image or sound reproduction, any patent, trade mark, design or model, plan, secret formula process, software, or for the use of, or the right to use industrial, commercial or scientific equipment, including ships, aircraft, railway, road vehicles, and containers or for information concerning industrial, commercial or scientific experience.

(5) The provisions of paragraphs 1 and 2 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, through a permanent establishment situated therein and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment. In such case the provisions of Article 8, 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 in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment then such royalties shall be deemed to arise in the Contracting State in which the permanent establishment is situated.

(7) Where, by reason of a special relationship 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 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 Agreement.