DT2811 - DT: Austria: double taxation agreement, Article 12: Royalties

(1) Subject to the provisions of paragraph (2) of this Article, royalties derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State.
(2) Where royalties paid by a company which is a resident of a Contracting State are beneficially owned by a company which is a resident of the other Contracting State and controls directly or indirectly more than 50 per cent of the voting power of the company paying the royalties, those royalties may, notwithstanding the provisions of paragraph (1) of this Article, be taxed in the first-mentioned State, but the tax so charged shall not exceed 10 per cent of the gross amount of the royalties.
(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 provisions of paragraphs (1) and (2) of this Article shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, has in the other Contracting State a permanent establishment and the right or property giving rise to the royalties is effectively connected with a business carried on through that permanent establishment. In such a case, the provisions of Article 7 shall apply.
(5) Any provision of the law of a Contracting State which requires royalties paid by a company to be left out of account as a deduction in computing the company's taxable profits because they are treated as a dividend or distribution shall not operate in relation to royalties paid to a resident of the other Contracting State. The preceding sentence shall not however apply if the right or property giving rise to the royalties was created or assigned mainly for the purpose of taking advantage of the provisions of this Article and not for bona fide commercial reasons.
(6) Where, owing to a special relationship between the payer and the beneficial owner 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 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 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 Convention.