Non-discrimination prevents differential taxation of foreign nationals and enterprises, ensuring equivalent tax treatment across contracting states.

Non-discrimination bars a Contracting State from subjecting nationals of the other State to taxes or related requirements that are different or more burdensome than those applied to its own nationals; it extends to non-residents. Permanent establishments must not be taxed less favourably than domestic enterprises, with specified limits on entitlement to personal allowances and permitted tax-rate differentials. Payments such as interest and royalties to residents of the other State must be deductible on the same conditions as if paid to domestic residents, and controlled enterprises must not be subjected to more burdensome taxation. The Article covers taxes of every kind.

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