ARTICLE 13
Royalties
(1) Royalties arising in a Contracting State and paid to a resident of the other Contracting
State shall be taxable by that other Contracting State.
(2) Royalties may be taxed in the Contracting State where they arise, and according to the
law of that State, but the tax so charged shall not exceed 10 percent of the gross amount of the
royalty.
(3) The term “royalties” as used in this Article means-
(a) Payments of any kind received as consideration for the use of, or the right to
use, any copyright of a literary, artistic or scientific work, including copyrights of motion
picture films or radio or television broadcasting tapes, any patent, trademark, design or
model, plan, secret formula or process, or for information concerning industrial,
commercial, or scientific experience or skill (know-how), and
(b) Gains derived from the sale, exchange, or other disposition of any such
property or rights to the extent that the amounts realized on such sale, exchange, or other
disposition for consideration are contingent on the productivity, use, or disposition of
such property or rights.
(4) The provisions of paragraph (2) 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 establishment with which the right or property giving rise to the royalties is
effectively connected. In such a case, the provisions of Article 8 shall apply.
(5) Royalties shall be deemed to arise in a Contracting State only to the extent that such
royalties are payments made as consideration for the use of, or the right to use, property or rights
described in paragraph (3) within that Contracting State.
(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 been 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 Convention.