Interest withholding limits: source state may tax interest but cap applies when recipient is beneficial owner. Article 11 allocates taxing rights over interest: interest paid to a resident of the other Contracting State may be taxed in that resident's State, but ... Summary
Interest withholding limits: source state may tax interest but cap applies when recipient is beneficial owner.
Article 11 allocates taxing rights over interest: interest paid to a resident of the other Contracting State may be taxed in that resident's State, but may also be taxed in the source State where it arises; if the recipient is the beneficial owner the source tax shall not exceed ten percent of the gross interest. Interest connected to a permanent establishment or fixed base is treated as arising in the State where that establishment or base is situated and taxed under business profits or independent personal services provisions. Special-relationship adjustments limit treaty relief to the arm's-length amount.
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