Document ID: chunk:federal_register_of_legislation:C2008A00102:schedule:6:p17
Version: federal_register_of_legislation:C2008A00102
Segment Type: schedule
Provision Reference: sch 6 (pt 17/39)
Character Range: 43223–45889

in the Contracting State in which they arise and according to the law of that Contracting State, but the tax so charged shall not exceed 5 per cent of the gross amount of the royalties.

3.  The term "royalties" as used 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 supply of scientific, technical, industrial or commercial knowledge or information;

c)  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) or any such knowledge or information as is mentioned in subparagraph b);

d)  the use of, or the right to use:

(i) motion picture films; or

(ii) films or audio or video tapes or disks, or any other means of image or sound reproduction or transmission for use in connection with television, radio or other broadcasting; or

e)  total or partial forbearance in respect of 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 and the property or right in respect of which the royalties are paid or credited is effectively connected with such permanent establishment.  In such case the provisions of Article 7 shall apply.

5.  Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that Contracting State for the purposes of its tax.  Where, however, the person paying royalties, whether such person is a resident of a Contracting State or not, has in a Contracting State or a state other than the Contracting States a permanent establishment in connection with which the liability to pay or credit the royalties was incurred, and such royalties are borne by such permanent establishment, then:

a)  if the permanent establishment is situated in a Contracting State, such royalties shall be deemed to arise in that Contracting State; and

b)  if the permanent establishment is situated in a state other than the Contracting States, such royalties shall not be deemed to arise in either Contracting State.

6.  Where, by reason of a special relationship between the payer and the beneficial owner of the