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HMRC internal manual

Double Taxation Relief Manual

Double Taxation Relief Manual: Guidance by country: Australia: Royalties

The Agreement provides for a reduced rate of withholding tax of 5%.

This reduced rate is not available:

* if the royalties were effectively connected with a permanent establishment in the other country
* for any amount paid in excess of the amount that would have been agreed between unconnected persons or 
* if the royalty was created or assigned to take advantage of the Article.

The definition of royalties does not follow the standard OECD definition. In any case of doubt, the exact wording must be consulted.