by a resident of the other Contracting State shall he taxable only in that other State.
4. 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
(including motion picture films and works on film or videotape for use in connection with television), any
patent, trademark, design or model, plan, secret formula or process, or for the use of, or the right to
use, tangible personal property or for information concerning industrial, commercial or scientific
experience, and, notwithstanding the provisions of Article XIII (Gains), includes gains from the
alienation of any intangible property or rights described in this paragraph to the extent that such gains are
contingent on the productivity, use or subsequent disposition of such property or rights.
5. The provisions of paragraphs 2 and 3 shall not apply if the beneficial owner of the royalties, being
a resident of a Contracting 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 VII (Business Profits) or Article XIV. (Independent Personal Services), as the
case may be, shall apply.
6. For the purposes of this Article, royalties shall be deemed to arise in a Contracting State when
the payer is that State itself, or a political subdivision, local authority or resident of that State. However:
(a) Except as provided in subparagraph (b), where the person paying the royalties,
whether he is a resident of a Contracting State or not, has in a State other than that of which he
is a resident a permanent establishment or a fixed base in connection with which the obligation
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 State in which the permanent
establishment or fixed base is situated and not in the State of which the payer is a resident; and
(b) Where the royalties are for the use of intangible property or tangible personal
property in a Contracting State, then such royalties shall be deemed to arise in that State and
not in the State of which the payer is a resident.
7. 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 Convention.
8. Where a resident of a Contracting State pays royalties to a person other than a resident of the
other Contracting State, that other State may not impose any tax on such royalties except insofar as they