Interest taxation: source-state withholding permitted at reduced rate, subject to beneficial owner, PE, and exemption rules.

Interest paid to a resident of the other Contracting State may be taxed in the recipient's State, while the source State may also tax the interest but generally not above a reduced withholding when the recipient is the beneficial owner. Exemptions apply for interest paid to the other State's government, government-owned financial institutions, the central bank, political subdivisions or local authorities, and for interest on government-guaranteed or insured loans. Interest effectively connected with a permanent establishment or fixed base is taxed under the rules for business profits or independent personal services, and amounts above arm's-length interest remain taxable under domestic law.

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