China treaty royalties — why does the IRS table show 'effectively 7%' for equipment rental?
I'm Chinese and my US LLC pays my Chinese parent company royalties for use of industrial equipment. The IRS Table 1 says the China treaty royalty rate is 10%, but a footnote says 'effectively 7%' for equipment rental. What's the math and is the 7% rate automatic or do I have to do something?
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