(1) Royalties arising in a Contracting State and paid to a resi-
dent 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
3 per cent of the gross amount of the royalties.
(3) The term “royalties” as used in this Article 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 (includ-
ing motion pictures or films, recordings on tape or other media
used for radio or television broadcasting or other kind of trans-
mission), any patent, trade mark, design or model, plan, secret
formula or process, or for the use of, or the right to use, any
copyright of computer programs, or for information concerning
industrial, commercial or scientific experience. The term “royal-
ties” shall also include payments of any kind for the use of or the
right to use a person’s name, picture or any other similar person-
ality 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 effectively
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 Con-
tracting State or not, has in a Contracting State a permanent
establishment or 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 the Contracting State in which the
permanent establishment or fixed base 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 pro-
visions 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 Convention.