(1) Royalties including other like payments 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 be taxed in the
Contracting State in which they arise, but the tax so
charged shall not exceed
a) 5 per cent of the gross amount of such payments if
they are made as consideration for the use of, or
the right to use any copyright of literary, artistic
or scientific work;
b) 15 per cent of the gross amount of such payments if
they are made as consideration for the use of, or
the right to use, any patent, trade mark, design or
model, plan, secret formula or process, or for informa-
tion concerning industrial, commercial or scientific
experience, or for the use of, or the right to use, cine-
matograph films or tapes for television or broad-
casting.
(3) The provisions of paragraph 2 shall likewise ap-
ply to the gains from the alienation of any right or
Property giving rise to such royalties if such right or
property is alienated by a resident of a Contracting
State for exclusive use in the other Contracting State
and the payment of such right or property is borne by
an enterprise of that other State or a permanent estab-
lishment situated therein.
(4) The provisions of paragraphs 2 and 3 shall not
apply if the recipient of the royalties, being a resident
of a Contracting State, has in the other Contracting
State in which the royalties arise a permanent establish-
ment and the royalties are attributable to that permanent
establishment, provided that under the law of that other
State the royalties are taxed as part of the profits of
the permanent establishment
(5) Royalties shall be deemed to arise in a Contract-
ing State when the payer is that State, a "Land", a
political subdivision, a local authority or 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 with which the right or property giving rise
to the royalties is effectively connected, and such royal-
ties are borne by such permanent establishment, then
such royalties shall be deemed to arise in the Contract-
ing State in which the permanent establishment is sit-
uated.
(6) Where, owing to a special relationship between the
payer and the recipient or between both of them and
some other person, the amount of the royalties paid,
having regard to the use, right or information for which
they are paid, exceeds the amount which would have
een agreed upon by the payer and the recipient in
the absence of such relationship, the provisions of this
Article shall apply only to the last-mentioned amount. In
that case, the excess part of the payments shall remain
taxable according to the law of each Contracting State,
due regard being had to the other provisions of this
Agreement.