Italy Royalties
Treaty |
Italy |
Article |
Royalties |
Signed |
May 8, 1990 |
In Force |
October 3, 1993 |
Article 12 Royalties
1. Royalties arising in one of the States and paid to a resident of the other State shall be taxable in that other State.
2. However, said royalties may be taxed in the State in which they arise and under the laws of this State but, if the person collecting the royalties is the beneficial owner of said royalties, the tax so established may not exceed 5 percent of the gross amount of the royalties. The competent authorities of both States shall determine by mutual agreement the conditions governing the application of this paragraph.
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 recordings for radio or television broadcasts, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial or scientific experience.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of one of the States, carries on a trade or business in the other State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case the royalties may be taxed in said State in accordance with its own domestic laws.
5. The royalties are deemed to arise in one of the States when the payer is that State itself, a political or administrative sub-division, a local authority or a resident of that State. However, when the payer of the royalties, whether or not he is a resident of one of the States, has in one of the States a permanent establishment or a fixed base for which the contract resulting in the payment of the royalties was concluded and to which said royalties are charged, these royalties are deemed to arise in the State in which the permanent establishment or fixed base is situated.
6. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are 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 last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each State, due regard being had to the other provisions of this Convention.
The above information is the wording of the article dealing with the withholding tax on royalties of the tax treaty between The Netherlands and Italy. Please note that the ultimate withholding tax rate may differ from the treaty rate, for instance as consequence of domestic anti-abuse legislation, provisions of the treaty protocol, etc. Before you use this information we therefore strongly recommend that you consult us to determine the accurate withholding tax rate for your specific situation. If you require our follow up, you can contact us via e-mail or call us at our offices: Ph. + 31 (10) 2010466. |