Document ID: chunk:federal_register_of_legislation:C2004A01208:schedule:47:p12
Version: federal_register_of_legislation:C2004A01208
Segment Type: schedule
Provision Reference: sch 47 (pt 12/25)
Character Range: 117516–120200

so entitled in the absence of that relationship, the provisions of this Article shall apply only to the lastmentioned amount.  In that case, the excess part of the amount of the interest paid shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

8 The provisions of this Article shall not apply if the indebtedness in respect of which the interest is paid was created or assigned with the main purpose of taking advantage of this Article and not for bona fide commercial reasons.  In that case the provisions of the domestic law of the Contracting State in which the interest arises shall apply.

Article 12

ROYALTIES

1 Royalties arising in a Contracting State, being royalties to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

2 However, those royalties 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 10 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:

        (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; or

        (b) the use of, or the right to use, any industrial, commercial or scientific equipment; or

        (c) the supply of scientific, technical, industrial or commercial knowledge or information; or

        (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 subparagraph (a), any such equipment as is mentioned in subparagraph (b) or any such knowledge or information as is mentioned in subparagraph (c); or

 (e) the use of, or the right to use:

 (i) motion picture films; or

 (ii) films or video tapes for use in connection with television; or

 (iii) tapes for use in connection with radio broadcasting; or

        (f) total or partial forbearance in respect of the use or supply of any property or right referred to in this paragraph.

4 The term "royalties" also includes income, profits or gains derived from the sale, exchange or other disposition of any property or right described in this paragraph to the extent to which the amounts realised on such sale, exchange or other disposition are contingent on the productivity, use or further disposition of such property or right.

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