Document ID: chunk:federal_register_of_legislation:C2004A04052:schedule:29:p12
Version: federal_register_of_legislation:C2004A04052
Segment Type: schedule
Provision Reference: sch 29 (pt 12/64)
Character Range: 31163–33858

1. Royalties which arise in a Contracting State and which are beneficially owned by a resident of the other Contracting State may be taxed in that other State.

2. Such royalties may be taxed in the Contracting State in which they arise, and according to the laws of that Contracting 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:

SCHEDULE 1—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 know-how 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 sub-paragraph (a), any such equipment as is mentioned in subparagraph (b) or any such know-how or information as is mentioned in sub-paragraph (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; or

     (f) giving up, wholly or partly, a right relating to the use or supply of any property or right referred to in this paragraph.

4. The provisions of paragraphs (1) and (2) 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 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 Contracting State, a political subdivision or local authority of that State or a person who, by reason of the provisions of paragraph (1) of Article 4, is a resident of that State. Where, however, the person paying the royalties, whether the person is a resident of a Contracting State or not, has in a Contracting State a permanent establishment