The Dutch tax authority has published a response to a question on whether payments for software distribution licenses would be considered royalties under Article 12 (Royalties) of the 1978 income tax treaty with South Korea and subject to withholding tax in South Korea. The question concerned a Dutch software company (X BV), which licensed software to a distributor in South Korea. The distributor could sublicense to customers, but neither it nor the customers had the right to reproduce, modi…