(1) Royalties derived and beneficially owned by a resident of a
Contracting State shall be taxable only in that State.
(2) 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.
(3) 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 a case the provisions of Article 7 or Article
14, as the case may be, shall apply.
(4) 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 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 that 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.
