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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.

ARTICLE 12

Royalties

(1) Royalties generated in one of the Contracting States and paid to a resident of the other Contracting State may be taxed in the other Contracting State.

(2) However, such royalties may be taxed in the Contracting State where they were generated according to the legislations of that State. If the beneficiary is the owner, the tax may not exceed 18% of the gross amount of the royalties.

(3) The term "royalties", as used in this Convention, shall mean payment of any kind received as a consideration for the use of or the right to use any copyright for a literary, artistic or scientific work, including cinematographic films or films and tapes, used for radio or television broadcasting, any patent, trademark, design or model, plan, secret formula or process or for the use of or the right to use industrial, commercial or scientific equipment or transport facilities or for information relating to industrial, commercial or scientific experiments.. It may not include any other payments related to mining, mines, oil or other natural resources.

(4) The provisions of paragraphs (1) and (2) of this Article shall not apply if the recipient of the royalties, being a resident of a Contracting State, carries on business activities in the other Contracting State in which the royalties arise, through a permanent establishment situated therein or renders in the other Contracting State independent personnel services from a fixed base situated therein and the right or property, in respect of which such 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 of this Convention, as the case may be, shall apply.

(5) Royalties shall be deemed to arise in a Contracting State if the payer is that Contracting State, one of its local authorities or a resident of that State. Where, however, a person paying the royalties, whether he is a resident of the Contracting State or not, has in the Contracting State a permanent establishment or a fixed base in connection with which the liability to pay royalties was incurred and expenditure for the payment of such royalties is incurred by 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.

(6) Where, by reason of a special relationship between the payer and the beneficial owner of royalties or between both of them and some other person, the amount of royalties having regard to the use, right or information on the basis of which they are paid exceeds the amount which would have been agreed upon between the payer and the recipient, in the absence of such special, the provisions of this Article shall apply only to the last mentioned amount. In such a case the excess part of payment shall, remain taxable in accordance with the laws of each Contracting State, due regard being had to the other provisions of this Convention.