Taxation of interest: source state may tax but reduced levy for resident beneficial owners; exemptions for public authorities. Taxation of interest is allocated between source and residence; the residence State may tax interest paid to its residents, and the source State may also tax such interest but its tax is limited when the beneficial owner is a resident of the other Territory. Exemptions exist for territorial authorities, Central Banks and Export-Import Banks, and other mutually accepted institutions. Interest is defined as income from debt-claims, arises where the payer is resident or where tied to a permanent establishment or fixed base, and special-relationship excesss are limited to arm's length amounts.
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 state may tax but reduced levy for resident beneficial owners; exemptions for public authorities.
Taxation of interest is allocated between source and residence; the residence State may tax interest paid to its residents, and the source State may also tax such interest but its tax is limited when the beneficial owner is a resident of the other Territory. Exemptions exist for territorial authorities, Central Banks and Export-Import Banks, and other mutually accepted institutions. Interest is defined as income from debt-claims, arises where the payer is resident or where tied to a permanent establishment or fixed base, and special-relationship excesss are limited to arm's length amounts.
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