Interest taxation: source state may impose limited withholding; resident state taxation, PE nexus and anti abuse rules govern allocation. Interest arising in a Contracting State and paid to a resident of the other State may be taxed in the recipient's State; the source State may also tax such interest but subject to a limited withholding where the recipient is the beneficial owner. Payments to specified Government entities are taxable only in the recipient's State when beneficially owned by that State. 'Interest' broadly covers income from debt claims, excluding late payment penalties. Where the beneficial owner has a permanent establishment or fixed base and the debt is effectively connected, Articles on business profits or independent personal services apply. Special relationships triggering non arm's length interest are limited to an arm's length amount for treaty benefits.