Israel - Royalty

Article 13. Royalties

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

2. However, such royalties may be taxed in the State in which they arise, and according to the law of that State, but the tax so
charged shall not exceed:

a 10 per cent of the amount of the royalties for cinematograph films and films or video-tapes for radio or television broadcasting;

b 5 per cent of the amount of all other royalties.

3. The competent authorities of the States shall by mutual agreement settle the mode of application of paragraph 2.

4. 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 films or video-tapes for radio or television
broadcasting, 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.

5. The provisions of paragraphs 1 and 2 shall not apply if the recipient of the royalties, being a resident of one of the States, has in
the other State in which the royalties arise a permanent establishment with which the right or property giving rise to the royalties is
effectively connected. In such a case the provisions of Article 8 shall apply.

6. Royalties shall be deemed to arise in one of the States when the payer is that State itself, a political subdivision, a local authority
or a resident of that State. Where, however, the person paying the royalties, whether he is a resident of one of the States or not, has
in one of the States a permanent establishment in connection with which the contract under which the royalties are paid was
concluded, 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.

7. Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the
amount of the royalties paid, 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 recipient in the absence of such relationship, the provisions of this Article shall apply
only to the last-mentioned amount. In that case. the excess part of the payments shall remain taxable according to the law of each
State, due regard being had to the other provisions of this Convention.

Protocol:

III Ad Articles 11, 12 and 13

Applications for the restitution of tax levied contrary to the provisions of Articles 11, 12 and 13 to be lodged with the competent
authority of the State having levied the tax within a period of 5 years after the expiration of the calendar year in which the tax has
been levied.