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HMRC internal manual

Double Taxation Relief Manual

DT: Jamaica: double taxation agreement, Article 10: Royalties

  1. Royalties arising in one of the territories which are derived and beneficially owned by a resident of the other territory may be taxed in that other territory.

  2. However, such royalties may also be taxed in the territory in which they arise and according to the law of that territory, but the tax so charged shall not exceed 10 per cent of the gross amount of the royalties.

  3. 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 cinematograph films, and films, or tapes for radio or television broadcasting), any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience.

  4. The provisions of paragraphs (1) and (2) of this Article shall not apply if the beneficial owner of the royalties, being a resident of one of the territories, has in the other territory in which the royalties arise a permanent establishment and the right or property giving rise to the royalties is effectively connected with a business carried on through that permanent establishment. In such a case, the provisions of Article 5 shall apply.

  5. Royalties shall be deemed to arise in one of the territories where the payer is the Government of that territory or a political sub-division thereof, a local authority or a resident of that territory. Where, however, the person paying the royalties, whether he is a resident of one of the territories or not, has in one of the territories a permanent establishment in connection with which the obligation to pay the royalties was incurred and the royalties are borne by that permanent establishment, then the royalties shall be deemed to arise in the territory in which the permanent establishment is situated.

  6. Where, owing to a special relationship between the payer and the beneficial owner 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 ate 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 lastmentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each territory, due regard being had to the other provisions of this Agreement.