Interest taxation rules limit source taxation for beneficial owners and provide exemptions and permanent establishment rules. Article 11 allocates taxation of interest between Contracting States: interest may be taxed in the recipient's State, and the source State may tax interest but, if the beneficial owner is resident in the other State, source tax shall not exceed 10 per cent of the gross amount. Exemptions apply for specified public authorities and agreed institutions. The Article defines interest as income from debt claims (excluding penalties), deems interest to arise where the payer is resident or where a permanent establishment or fixed base bears the interest, and treats interest connected to a permanent establishment or fixed base under business or independent personal services provisions. Related party excess interest is limited to the arm's length amount.
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.
Interest taxation rules limit source taxation for beneficial owners and provide exemptions and permanent establishment rules.
Article 11 allocates taxation of interest between Contracting States: interest may be taxed in the recipient's State, and the source State may tax interest but, if the beneficial owner is resident in the other State, source tax shall not exceed 10 per cent of the gross amount. Exemptions apply for specified public authorities and agreed institutions. The Article defines interest as income from debt claims (excluding penalties), deems interest to arise where the payer is resident or where a permanent establishment or fixed base bears the interest, and treats interest connected to a permanent establishment or fixed base under business or independent personal services provisions. Related party excess interest is limited to the arm's length amount.
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