Taxation of interest: source taxation subject to a withholding cap, with exemptions and permanent establishment exceptions. Taxation of cross border interest allows residence state taxation of the beneficial owner while the source State may tax subject to a withholding limitation; governments and central banks are exempt. The limitation is inapplicable to interest effectively connected with a permanent establishment or fixed base, in which case business profits or independent personal services rules apply. Interest is deemed to arise where the payer is resident unless borne by a permanent establishment or fixed base in another State. Related party pricing adjustments limit treaty relief to the arm's length amount, leaving any excess taxable under domestic law.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Taxation of interest: source taxation subject to a withholding cap, with exemptions and permanent establishment exceptions.
Taxation of cross border interest allows residence state taxation of the beneficial owner while the source State may tax subject to a withholding limitation; governments and central banks are exempt. The limitation is inapplicable to interest effectively connected with a permanent establishment or fixed base, in which case business profits or independent personal services rules apply. Interest is deemed to arise where the payer is resident unless borne by a permanent establishment or fixed base in another State. Related party pricing adjustments limit treaty relief to the arm's length amount, leaving any excess taxable under domestic law.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
Join Channel
TaxTMI 
