Article 15 - Management fees - Tanzania (Old - Effective upto 31-3-2012)

Article 15 : Management fees 1. Management or professional fees 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 management or professional fees may be taxed in the Contracting State in which they arise and according to the law of that State, but the tax so charged shall not exceed twenty per cent of the gross amount of the management or professional fees. 3. The term "management or professional fees" as used in this Article means payments of any kind to any person, other than to an employee of the person making the payments, in consideration for any services of a managerial, technical or consultancy nature. 4. The provisions of paragraphs 1 and 2 shall not apply if the recipient of the management or professional fees, being a resident of a Contracting State, carries on business in the other Contracting State in which the management or professional fees arise, through a permanent establishment situated therein, or performs in that other State professional services from a fixed base situated therein, and the right of property in respect of which the management or professional fees are paid, is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 16, as the case may be, shall apply. 5. Management or professional fees shall be deemed to arise in a Contracting State when the payer is that Contracting State itself, a political sub-division, a local authority or a resident of that State. Where, however the person paying the management or professional fees, whether he is a resident of that State or not, has in a Contracting State a permanent establishment in connection with which the liability to pay the management or professional fees was incurred and such management or professional fees are borne by such permanent establishment, then such management or professional fees shall be deemed to arise in the Contracting State in which the permanent establishment is situated. 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 management or professional fees paid having regard to the services from which it is 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 payment shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Agreement.