Taxation of interest: source state withholding capped where the beneficial owner is resident of the other Contracting State.

Interest paid to a resident of the other Contracting State may be taxed in the recipient's State, but the source State may also tax such interest and, where the beneficial owner is a resident of the other State, source taxation is limited to 10 per cent of the gross amount. Exemptions apply for the Government, sub national authorities, designated central banks and other institutions agreed by the Competent Authorities. Interest is deemed to arise where the payer is resident, subject to deemed source rules linking interest to a permanent establishment or fixed base, and arm's length adjustments apply to amounts affected by special relationships.

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