1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may
be taxed in that other State.
2. However, such royalties may also be taxed in the Contracting State in which they arise and
according to the laws of that State, but if the beneficial owner is a resident of the other Contracting
State, the tax so charged shall not exceed 10 percent of the gross amount of the royalty.
3. The term "royalties" as used in this Convention means payments of any kind received as a
consideration for the use of, or the right to use, any copyright of literary, artistic, or scientific work,
including motion picture films and works on film or tapes or other means of reproduction for use in
connection with television, any patent, trademark, design or model, plan, secret formula or process, or
other like right or property, or for information concerning industrial, commercial, or scientific experience
as well as for the use of or the right to use industrial, commercial, or scientific equipment not constituting
immovable property referred to in Article 6. The term "royalties" also includes gains derived from the
alienation of any such right or property which are contingent on the productivity, use, or disposition
thereof.
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 or has carried on business in the other Contracting State, in
which the royalties arise, through a permanent establishment situated therein, or performs or has
performed in that other State independent personal services from a fixed base situated therein, and the
royalties are attributable to such permanent establishment or fixed base. In such case the provisions of
Article 7 (Business Profits) or Article 14 (Independent Personal Services), as the case may be, shall
apply.
5. Where there is a special relationship between the payer and the beneficial owner or between both
of them and some other person and the amount of the royalties, for whatever reason, exceeds the
amount which would have been agreed upon by the payer and the beneficial owner in the absence of
such relationship, the provisions of this Article shall apply only to the last mentioned amount. In such
case the excess part of the payments shall remain taxable according to the laws of each Contracting
State, due regard being had to the other provisions of the Convention.
6. Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a
political subdivision, a local authority or a resident of that State. However,
a) Where the person paying the royalties, whether he is a resident of a Contracting State
or not, has in a Contracting State a permanent establishment or a fixed base in connection with
which the liability to pay the royalties was incurred, and such royalties are borne by such
permanent establishment or fixed base, then such royalties shall be deemed to arise in that State
in which the permanent establishment or fixed base is situated; or
b) where subparagraph (a) does not operate to deem royalties as arising in either
Contracting State and the royalties relate to the use of, or the right to use, in one of the
Contracting States, any property or right described in paragraph 3, they shall be deemed to
arise in that State.