Interest taxation under the treaty: residence taxation with limited source withholding and specific exemptions.

Article 11 allocates taxation of interest to the recipient's residence while allowing source-state taxation subject to a capped withholding when the beneficial owner is a resident of the other Contracting State, with exemptions for governments, specified central banks and agreed institutions. The Article defines interest, excludes penalties, treats interest as arising in the payer's State unless attributable to a permanent establishment or fixed base, and restricts treaty relief where related-party relationships cause non arm's length interest.

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