Document ID: chunk:federal_register_of_legislation:C2004A02224:body:0:p19
Version: federal_register_of_legislation:C2004A02224
Segment Type: other
Provision Reference: 
Character Range: 44188–46891

of each Contracting State, but subject to the other provisions of this Agreement.
(7) Interest derived by the Government of a Contracting State, or by any other body exercising governmental functions in, or in a part of, a Contracting State, or by a bank performing central banking functions in a Contracting State, shall be exempt from tax in the other Contracting State.
(8) The Philippine tax on interest arising in the Philippines in respect of public issues of bonds, debentures or similar obligations and paid by a company which is a resident of the Philippines to a resident of Australia shall not exceed 10 per cent of the gross amount of the interest.
(9) The principles set forth in paragraphs (1) to (7) inclusive of Article 5 shall be applied in determining for the purposes of this Article whether there is a permanent establishment outside both Contracting States, and whether an enterprise, not being an enterprise of one of the Contracting States, has a permanent establishment in one of the Contracting States.
ARTICLE 12
Royalties
(1) Royalties arising in one of the Contracting States, being royalties to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.
(2) Such royalties may also be taxed in the Contracting State in which they arise, and according to the law of that State. However, the tax so charged shall not exceed—
     (a) 15 per cent of the gross amount of the royalties where the royalties are paid by an enterprise registered with the Philippine Board of Investments and engaged in preferred areas of activities; and
     (b) in all other cases, 25 per cent of the gross amount of the royalties.
(3) The term "royalties" in this Article means payments or credits, whether periodical or not, and however described or computed, to the extent to which they are made as consideration for—
SCHEDULE 14—continued
     (a) the use of, or the right to use, any copyright, patent, design or model, plan, secret formula or process, trademark, or other like property or right;
     (b) the use of, or the right to use, any industrial, commercial or scientific equipment;
     (c) the supply of scientific, technical, industrial or commercial knowledge or information;
     (d) the supply of any assistance that is ancillary and subsidiary to, and is furnished as a means of enabling the application or enjoyment of, any such property or right as is mentioned in paragraph (a), any such equipment as is mentioned in paragraph (b) or any such knowledge or information as is mentioned in paragraph (c);
     (e) the use of, or the right to use—
          (i) motion picture films;
          (ii) films or video tapes for use in