Document ID: chunk:federal_register_of_legislation:C2004A04052:schedule:29:p54
Version: federal_register_of_legislation:C2004A04052
Segment Type: schedule
Provision Reference: sch 29 (pt 54/64)
Character Range: 135329–138065

(2) Such royalties may 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.

SCHEDULE 2—continued

(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;

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

     (c) the supply of scientific, technical, industrial (including agricultural) 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 of the kinds 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);

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

         (i) motion picture films;

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

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

     (f) the supply by a resident of one of the Contracting States of management services in the other Contracting State; or

     (g) total or partial forbearance in respect of the use of a property or right referred to in this paragraph.

(4) The provisions of paragraphs (1) and (2) shall not apply if the person beneficially entitled to the royalties, being a resident of one of the Contracting States, 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 or credited 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.

(5) Royalties shall be deemed to arise in a Contracting State when the payer is that State itself or a political subdivision or local authority of that State or a person who is a resident of that State for the purposes of its tax. Where, however, the person paying the royalties, whether the person is a resident of one of the Contracting States or not, has in one of the Contracting States or outside both Contracting States a permanent establishment