1. Royalties arising in a Contracting State and paid to a resident of the other  Contracting State may be taxed in that other State.  

2. However, such royalties may also be taxed in the Contracting State in which they  arise and according to the laws of that State, but if the beneficial owner of the royalties is a  resident of the other Contracting State, the tax so charged shall not exceed 5 per cent of the  gross amount of the royalties. The competent authorities of the Contracting States shall by  mutual agreement settle the mode of application of this limitation.  

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 cinematography films, any patent, software, trade mark, design or  model, plan, secret formula or process, 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 a Contracting State, carries on business in the other  Contracting State in which the royalties arise through a permanent establishment situated  therein and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall  apply.

5. Royalties shall be deemed to arise in a Contracting State when the payer is a  resident of that State. Where, however, the person paying the royalties, whether he is a  resident of a Contracting State or not, has in a Contracting State a permanent  establishment in connection with which the liability to pay the royalties was incurred, and  such royalties are borne by such permanent establishment, then such royalties shall be  deemed to arise in the State in which the permanent establishment 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 Contracting State, due regard being had to the other provisions of this Convention.