(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 Contract-
ing State in which they arise and according to the laws of that
State, but if the beneficial owner of the royalties is a resident of
the other Contracting State, 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 pay-
ments 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 cinematograph films, any patent, trade mark, design or
model, plan, secret formula or process, or for information
concerning industrial, commercial or scientific experience. The
term “royalties” shall also include payments of any kind for
the use or the right to use a person’s name, picture or any
other similar personality rights and on payments received as
consideration for the registration of entertainers’ or sportsmen’s
performances by radio or television.
(4) The provisions of paragraphs 1 and 2 shall not apply if the
beneficial owner of the royalties, being a resident of a Contract-
ing 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 is effective-
ly connected with such permanent establishment or fixed base.
In such 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 a resident of that State. Where, however, 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 place, then
such royalties shall be deemed to arise in the Contracting State
in which the permanent establishment or fixed place is situated.
(6) Where, by reason of a special relationship between the
payer and the beneficial owner or between both of them and
some other person, the amount of the royalties, having regard to
the use, right or information for which they are paid, 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 this Agreement.