(1) Royalties arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable in that other State.
(2) However, such royalties may be taxed in the Contracting State in which they arise, and according to the law of that State, but the tax so charged shall not exceed 15 per cent of the gross amount of the royalties which arise out of:
- (a) The use of, or the right to use, any copyright of literary, artistic or scientific work if the recipient is the author or the heir of the author or inventor; or
- (b) The use of, or the right to use, any patent, trademark, design or model, plan, secret formula or process, or information concerning industrial, commercial or scientific experience.
In so far as the transfer of technology requires approval under Argentine law, the restriction of the interest rate referred to in sub-paragraph (b) above shall be applied to royalties arising in the Argentine Republic only if the contract out of which the said royalties arise has been approved by the Argentine authorities.
(3) 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 or tape recordings for television or radio 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 for information concerning industrial, commercial or scientific experience.
(4) The provisions of paragraphs (1) and (2) shall not apply if the recipient 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 professional services in that other Contracting State through a fixed base situated therein, and the rights or items of property in respect of which the royalties are paid are effectively connected with the said permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14 shall apply, as appropriate.
(5) Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, one of its Lander or provinces or a political subdivision thereof or a local authority or a resident of that State. Where, however, the person paying the royalties, whether or not he is a resident of a Contracting State, has in a Contracting State a permanent establishment in connection with which the obligation to pay the royalties was incurred and the royalties are borne by that permanent establishment, then such royalties shall be deemed to arise in the Contracting State in which the permanent establishment is situated.
(6) Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the royalties paid, having regard to the use, right or information for which they are paid, exceeds the amount that would have been agreed upon by the payer and the recipient 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 may be taxed according to the law of each Contracting State, due regard being had to the other provisions of this Convention.