ARTICLE 14

Royalties

1. The tax imposed by one of the Contracting States on royalties derived from sources within that Contracting State by a resident of the other Contracting State shall not exceed 15 percent of the gross amount thereof, except as provided in paragraphs 2 and 3.

2. Royalties derived from copyrights, or rights to produce or reproduce any literary, dramatic, musical, or artistic work, by a resident of one Contracting State shall be taxable only in that Contracting State.

3. Paragraphs 1 and 2 shall not apply if the recipient of the royalty, being a resident of one of the Contracting States, has in the other Contracting State a permanent establishment and the right or property giving rise to the royalties is effectively connected with such permanent establishment. In such a case, the provisions of Article 8 (Business Profits) shall apply.

4. For the purposes of this article, the term "royalties" means any royalties, rentals, or other amounts paid as consideration for the use of, or the right to use:

(a) Copyrights, artistic or scientific works, patents, designs, plans, secret processes or formulae, trademarks, or other like property, or rights (not including motion picture films or films or tapes for radio or television broadcasting), or

(b) Information concerning industrial, commercial, or scientific knowledge, experience, or skill. The term does not include any royalties, rentals, or other amounts paid in respect of the operation of mines, quarries, or other natural resources.

5. Where any royalty paid by a person to any related person exceeds a fair and reasonable consideration in respect of the rights or property for which it is paid, the provisions of paragraphs 1 and 2 shall apply only to so much of the royalty as represents such fair and reasonable consideration; and the excess payment shall be characterized and taxed according to the laws of each Contracting State, including the provisions of this Convention where applicable.