DT3660.12 - DT: Bolivia: double taxation agreement, SI 95 No.2707, Article 12: Royalties
- Royalties arising in a Contracting state and paid to a resident
of the other Contracting State may be taxed in that other State.
- However, such royalties may also be taxed in the Contracting
State in which they arise and according to the laws of that State,
but if the recipient is the beneficial owner of the royalties the
tax so charged shall not exceed 15 per cent of the gross amount of
the royalties.
- 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 (know-how) concerning industrial, commercial or
scientific experience.
- The provisions of paragraph (1) of this Article 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, or performs in that other State
independent personal services from a fixed base situated therein,
and the right or property in respect of which the royalties are
paid is effectively connected with such permanent establishment or
fixed base. In such case the provisions or Article 7 or Article 14
of this Convention, as the case may be, shall apply.
- 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 paid exceeds, for whatever
reason, 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 Convention.
- Royalties shall be deemed to arise in a Contracting State where
the payer is that State itself, a political subdivision or local
authority thereof or 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 or a fixed base in connection with which the
obligation to pay the royalties was incurred and the royalties are
borne by such permanent establishment or fixed base, then the
royalties shall be deemed to arise in the Contracting State in
which the permanent establishment or fixed base is situated.
- The provisions of this Article shall not apply if it was the
main purpose or one of the main purposes of any person concerned
with the creation or assignment of the rights in respect of which
the royalties are paid to take advantage of this Article by means
of that creation or assignment.
