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HMRC internal manual

Double Taxation Relief Manual

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HM Revenue & Customs
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Namibia: double taxation agreement, Article 9: Royalties

(1) Any royalty which is payable as consideration for the use of, or for the privilege of using, any copyright in any literary, dramatic, musical or artistic work (but not including a rent or royalty in respect of cinematograph or television films) and which is derived from sources within one of the territories by a resident of the other territory who is subject to tax in that other territory in respect thereof (or would be so subject to tax if exempt in the first-mentioned territory) shall be exempt form tax in that first mentioned territory.

(2) Any royalty other than a royalty to which paragraph 1 of this Article applies, derived from sources within one of the territories by a resident of the other territory who is subject to tax in that other territory in respect thereof, may be subjected to tax in the first- mentioned territory, but such tax shall not exceed:

  1. one half of the tax which would be imposed in that territory but for the provisions of this Art.; or
  2. 5% of the royalty, whichever is less.

(3) The provisions of paragraphs 1 and 2 of this Article shall not apply if the recipient of the royalty being a resident of one of the territories has in the other territory in which the royalty arises a permanent establishment with which the right or property giving rise to the royalty is effectively connected.

(4) Where, owing to a special relationship between the payer and recipient of a royalty, the amount of the royalty, having regard to the use, right or property for 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 payments shall remain taxable according to the Contracting Parties’ own laws, due regard being had to the other provisions of the present Convention.

(5) In this Article, the term `royalty` means a payment of any kind received as consideration for the use of, or the right to use, any copyright, patent, trade mark, design or model, plan, secret formula or process, for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience, and includes any rental or like payment in respect of cinematograph or television films, but does not include any amount paid in respect of the operation of a mine, oil well or quarry or of any other extraction of natural resources.