Interest withholding limited on cross-border payments; source-state tax capped, exemptions for central banks and governments. Cross-border interest payments are taxable in the recipient's residence State, while the source State may also tax such interest but at a reduced rate when the beneficial owner is resident in the other Contracting State; specified public entities and mutually agreed institutions are exempt. Interest is defined as income from debt claims, excluding dividends and penalty charges. A permanent establishment or fixed base connection places taxation under business or independent services rules, and special relationship adjustments limit treaty relief to arm's length interest 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.
Interest withholding limited on cross-border payments; source-state tax capped, exemptions for central banks and governments.
Cross-border interest payments are taxable in the recipient's residence State, while the source State may also tax such interest but at a reduced rate when the beneficial owner is resident in the other Contracting State; specified public entities and mutually agreed institutions are exempt. Interest is defined as income from debt claims, excluding dividends and penalty charges. A permanent establishment or fixed base connection places taxation under business or independent services rules, and special relationship adjustments limit treaty relief to arm's length interest amounts.
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