(1) Royalties and management fees arising in a Contracting State
which are derived and beneficially owned by a resident of the other
Contracting State may be taxed in that other State.
(2) Royalties derived and beneficially owned by a resident
of a Contracting State may also 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.
(3) Management fees derived and beneficially owned by a
resident of a Contracting State may also 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 net amount of the management fees after deduction of any amount
allowed as expenses against those management fees in computing the
tax payable thereon in the firstmentioned Contracting State.
(4)
(a) 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 but does not include royalties or other amounts paid in respect of the extraction or removal of natural resources.
(b) The term `management fees` as used in this Article means payments of any kind to any person, other than to an employee of the person making the payments, for, or in respect of, the provision of industrial, scientific or commercial advice, or management or technical services, or similar services or facilities, but it does not include payments for independent personal services mentioned in Article 15
(5) Notwithstanding the provisions of paragraph (2) of this
Article, copyright royalties and other like payments in respect of
the production or reproduction of any literary, artistic or
scientific work (excluding royalties and like payments in respect
of cinematograph films and films or tapes for radio or television
broadcasting) arising in a Contracting State and which are derived
and beneficially owned by a resident of the other Contracting State
shall be exempt from tax in the first-mentioned Contracting State.
(6) The provisions of paragraphs (1), (2) and (3) of this
Article shall not apply if the beneficial owner 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 and the right or property
giving rise to the royalties is, or the management fees are,
effectively connected with a business carried on through that
permanent establishment. In such a case, the provisions of Article
8 shall apply.
(7) Royalties and management fees shall be deemed to arise
in a Contracting State where the payer is that State itself, 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 obligation
to pay the royalties or management fees was incurred and the
royalties or management fees are borne by that permanent
establishment, then the royalties or management fees shall be
deemed to arise in the Contracting State in which the permanent
establishment is situated.
(8) 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 or management fees paid, having
regard to the advice, services, 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.
