Article 12 - Royalties and fees for included services - Malta (Old - Effective upto 1-4-2015)

Article 12 - Royalties and fees for included services - 1. Royalties and fees for included 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 included services may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties or fees for included services the tax so charged shall not exceed 15 per cent of the gross amount of the royalties or fees for included services. 3. The term royalties in this Article means payments or credits, whether periodical or not, and however described or computed to the extent to which they are made as consideration for : (a) the use of, or the right to use any copyright, patent, design or model, plan, secret formula or process, trademark or other like property or right ; (b) the use of, or the right to use, any industrial, commercial or scientific equipment ; (c) the supply of scientific, technical, industrial or commercial knowledge or information ; (d) the use of, or the right to use : (i) motion picture films ; (ii) films or video tapes for use in connection with television ; or (iii) tapes for use in connection with radio broadcasting ; or (e) total or partial forbearance in respect of the use or supply of any property or right referred to in this paragraph. 4. The term fees for included services in this Article means payments or credits, whether periodical or not, and however described or computed, to the extent to which they are made as consideration for : (a) the supply of any assistance that is ancillary and subsidiary to, and is furnished as a means of enabling the application or enjoyment of, any such property or right as is mentioned in sub-paragraph (a) of paragraph (3), or any such equipment as is mentioned in sub-paragraph (b) of paragraph (3); or any such knowledge or information as is mentioned in sub-paragraph (c) of paragraph (3) ; (b) rendering of any technical or consultancy services (including the provision of technical or other personnel) if such services make available technical knowledge, (experience, skill, know-how or process or consist of the development and transfer of a technical plan or technical design). 5. The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the royalties or fees for included services, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties or fees for included services arise, through a permanent establishment situated therein, or performs in that other State independent personal services from fixed base situated therein, and the right or property in respect of which the royalties or fees for included services are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 15, as the case may be, shall apply. 6. Royalties and fees for included services shall be deemed to arise in a ContractingState when the payer is that State itself, a political sub-division, a local authority or a resident of that State. Where, however, the person paying the royalties or fees for included services, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or fixed base in connection with which the liability to pay the royalties or fees for included services was incurred, and such royalties or fees for included services 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. 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 or fees for included services 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 ContractingState, due regard being had to the other provisions of this Agreement.