Direct Tax Avoidance Agreements

UZBEKISTAN

ARTICLE 13:

Technical fees

     1. Technical fees 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 technical fees may also be taxed in the Contracting State in which they arise, and according to the laws of that State; but if the recipient is the beneficial owner of the technical fees, the tax so charged shall not exceed ¹[10 per cent] of the gross amount of the technical fees.

     3. The term technical fees as used in this Article means payments of any kind to any person other than to an employee of the person making the payments, in consideration for any services of a technical, managerial or consultancy nature.

     4. The provisions of paragraphs 1 and 2 shall not apply, if the beneficial owner of the technical fees being a resident of a Contracting State carries on business in the other Contracting State in which the technical fees arise through a permanent establishment situated therein, or performs in that other State independent personal services and the technical fees are effectively connected with such permanent establishment or such services. In such case the provisions of Article 7 or Article 15, as the case may be, shall apply.

     5. Technical fees shall be deemed to arise in a Contracting State when the payee is that State itself, a political sub-division, a local authority or a statutory body thereof, or a resident of that State. Where, however, the person paying the technical fees whether he is a resident of a Contracting State or not, has in a resident of a Contracting State a permanent establishment or a fixed base in connection with which the obligation to pay the technical fees was incurred and such technical fees are borne by that permanent establishment or fixed base then such technical fees shall be deemed to arise in the Contracting State in which 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 persons the amount of the technical fees paid, exceeds for whatever reasons, 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 payment shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

Notes:-

1. Substituted vide Notification No. 49/2012, dated 07-11-2012, before it was read as:- "15 per cent"