Interest taxation: source taxation permitted with residence relief and limited withholding, plus exemptions for specified public institutions. Interest may be taxed in the residence State, while the source State may tax such interest subject to a withholding limitation when the beneficial owner is resident in the other Contracting State; designated public and governmental institutions may be exempt from source tax by express listing. Interest is broadly defined as income from debt-claims excluding penalty charges. Deemed-source rules attribute interest to the payer's residence unless tied to a permanent establishment or fixed base, in which case connection to that presence governs and anti-abuse adjustments apply to amounts exceeding arm's-length interest.
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: source taxation permitted with residence relief and limited withholding, plus exemptions for specified public institutions.
Interest may be taxed in the residence State, while the source State may tax such interest subject to a withholding limitation when the beneficial owner is resident in the other Contracting State; designated public and governmental institutions may be exempt from source tax by express listing. Interest is broadly defined as income from debt-claims excluding penalty charges. Deemed-source rules attribute interest to the payer's residence unless tied to a permanent establishment or fixed base, in which case connection to that presence governs and anti-abuse adjustments apply to amounts exceeding arm's-length interest.
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