Article 12B - Income from Automated Digital Services

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..... isions of Article 14, income from automated digital services arising in a Contracting State may also be taxed in the Contracting State in which it arises and according to the laws of that State , but if the beneficial owner of the income is a resident of the other Contracting State , the tax so charged shall not exceed ___ % of the gross amount of the payments underlying the income from automated digital services. the above percentage is to be established through bilateral negotiations. [ Para 2 of Article 12B ] Exception of Para 2 of Article 12B If the beneficial owner of the income from automated digital services, being a resident of a Contracting State, requests the other Contracting St .....

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..... hich the beneficial owner belongs is not available to the Contracting State in which the income from automated digital services arises, the provisions of this paragraph shall not apply ; in such a case, the provisions of paragraph 2 shall apply. [ Para 3 of Article 12B ] Meaning of Multinational Enterprises Group for the purpose of para 3 of Article 12B Multinational Enterprise Group means any group that includes two or more enterprises, the tax residence for which is in different jurisdictions. The term group means a collection of enterprises related through ownership or control such that it is either required to prepare Consolidated Financial Statements for financial reporting purposes under applicable accoun .....

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..... ent services (g) online gaming; (h) cloud computing services; and (i) standardized online teaching services. [ Para 5 6 of Article 12B ] Exclude if the payments underlying the income from automated digital services qualify as royalties or fees for technical services under Article 12 or Article 12A as the case may be. [ Para 7 of Article 12B ] Income deemed to be arise in Contracting State Income from automated digital services shall be deemed to arise in a Contracting State if the underlying payments for the income from automated digital services are made by a resident of that State or if the person making the underlying payments for the automated digit .....

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