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HMRC internal manual

Double Taxation Relief Manual

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HM Revenue & Customs
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DT: Soviet Union: double taxation agreement, Article 10: Royalties including copyright royalties

(1) Royalties arising in a Contracting State which are derived and beneficially owned by and paid to a person who is a resident of and has been present in the other Contracting State during the period in which those royalties arise shall be taxable only in that other State.
(2) The term `royalties` as used in this Article means payments of any kind for the sale of, the use of, or the right to use, any copyright of literary, artistic or scientific work (including cinematograph films, films or tapes for radio or television broadcasting and tapes for the production of gramophone records and other means of sound reproduction). This term also includes payments of any kind for the sale of, the use of, or the right to use, any patent, trade mark, service mark, design or model, secret formula or process, industrial, commercial or scientific equipment including any computer program or for information concerning industrial, commercial or scientific experience or knowledge or for the provision of technical services connected with such sale, use or right of use.
(3) The provisions of paragraph (1) of this Article shall not apply if the beneficial owner of the payments mentioned in paragraph (2) of this Article, being a resident of a Contracting State, carries on commercial activities in the other Contracting State through a permanent establishment situated therein, and the right or property in respect of which the royalties are paid is effectively connected with that permanent establishment. In such a case, the provisions of Article 6 shall apply.
(4) Where, by reason of an existing relationship between the payer and the beneficial owner of the payments mentioned in paragraph (2) of this Article or between both of them and some other person, the amount of the payments exceeds, for whatever reason, the amount which would have been agreed upon by independent persons, 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 laws of each Contracting State, due regard being had to the other provisions of this Convention.