ARTICLE 12

Royalties and Management Fees

(1) Royalties and management fees 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 payments may be taxed in the Contracting State in which they arise, and according to the laws of that State, but the tax so charged shall not exceed 15 per cent of the gross amount of the payments.

(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, and films or tapes for radio or television broadcasting), any patent, trade mark, 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 term "management fees" as used in this Article shall be deemed to include payments of any kind to any persons other than to an employee of the person making the payments in consideration of any services of a managerial, technical or consultancy nature as well as payments made in consideration of the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

(5) The provisions of paragraphs (1) and (2) shall not apply if the recipient of the royalties or management fees, being a resident of a Contracting State, has in the other Contracting State in which the royalties or management fees arise a permanent establishment with which the right or property giving rise to the royalties is effectively connected or to which the management fees are attributable; in such a case, the provisions of Article 7 shall apply.

(6) Royalties and management fees shall be deemed to arise in a Contracting State when the payer is that Contracting State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the royalties or management fees, 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 or management fees was incurred, and such royalties or management fees are borne by such permanent establishment, such royalties or management fees shall be deemed to arise in the Contracting State in which the permanent establishment is situated.

(7) Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of royalties or management fees paid  exceeds the amount which 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 that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Agreement.