ARTICLE 13
Royalties and fees for technical services
1. Royalties and fees for technical services 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 and fees for technical services may also be taxed in the Contracting
State in which they arise and according to the law of that State; but if the beneficial owner of
the royalties or fees for technical services is a resident of the other Contracting State, the tax
so charged shall not exceed:
a) in the case of royalties within paragraph (3)(a) of this Article, and fees for technical
services within paragraph (4)(a) and (c) of this Article;
(i) during the first five years for which this Convention has effect;
(aa)15 per cent of the gross amount of such royalties or fees
for technical services when the payer of the royalties or
fees for technical services is the Government of the
first-mentioned Contracting State or a political
subdivision of that State, and
(bb) 20 per cent of the gross amount of such royalties or
fees for technical services in all other cases; and
(ii) during subsequent years, 15 per cent of the gross amount of
such royalties or fees for technical services; and
b) in the case of royalties within paragraph (3)(b) of this Article and fees for technical
services defined in paragraph (4)(b) of this Article, 10 per cent of the gross amount of
such royalties and fees for technical services.
3. For the purposes of this Article, the term "royalties" means:
or work on films, tape or other means of reproduction for use in connection with
radio or television broadcasting, any patent, trademark, design or model, plan, secret
formula or process, or for information concerning industrial, commercial or scientific
experience; and
b) payments of any kind received as consideration for the use of, or the right to use, any
industrial, commercial or scientific equipment, other than income derived by an
enterprise of a Contracting State from the operation of ships or aircraft in
international traffic.
4. For the purposes of paragraph (2) of this Article, and subject to paragraph (5), of this
Article, the term "fees for technical services" means payments of any kind to any person in
consideration for the rendering of any technical or consultancy services (including the
provisions of services of technical or other personnel) which:
a) are ancillary and subsidiary to the application or enjoyment of the right, property or
information for which a payment described in paragraph (3)(a) of this Article is
received; or
b) are ancillary and subsidiary to the enjoyment of the property for which a payment
described in paragraph (3)(b) of this Article is received; or
c) make available technical knowledge, experience, skill, know-how or processes, or
consist of the development and transfer of a technical plan or technical design.
5. The definitions of fees for technical services in paragraph (4) of this Article shall not include
amounts paid:
a) for services that are ancillary and subsidiary, as well as inextricably and essentially
linked, to the sale of property, other than property described in paragraph (3)(a) of
this Article;
b) for services that are ancillary and subsidiary to the rental of ships, aircraft, containers
or other equipment used in connection with the operation of ships, or aircraft in
international traffic;
c) for teaching in or by educational institutions;
d) for services for the private use of the individual or individuals making the payment;
or
e) to an employee of the person making the payments or to any individual or partnership
for professional services as defined Article 15 (Independent personal services) of this
Convention.
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, property or
contract in respect of which the royalties or fees for technical services are paid is effectively
connected with such permanent establishment or fixed base. In such case, the provisions of
Article 7 (Business profits) or Article 15 (Independent personal services) of this Convention,
as the case may be, shall apply.
7. Royalties and fees for technical services shall be deemed to arise in a Contracting State
where the payer is that State itself, a political subdivision, a local authority or a resident of
that State. Where, however, the person paying the royalties or fees for technical services,
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 obligation to make payments was
incurred and the payments are borne by that permanent establishment or fixed base, then the
royalties or fees for technical services shall be deemed to arise in the Contracting State in
which the permanent establishment or fixed base is situated.
8. Where, owing to a special relationship between the payer and the beneficial owner or
between both of them and some other person, the amount of the royalties or fees for technical
services paid exceeds for whatever reason the amount which would have been paid 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 Convention.
9. The provisions of this Article shall not apply if it was the main purpose or one of the main
purposes of any person concerned with the creation or assignment of the rights in respect of
which the royalties or fees for technical services are paid to take advantage of this Article by
means of that creation or assignment.