Interest taxation limits: source state may tax with capped withholding when beneficial owner is resident elsewhere. Interest paid to a resident of the other Contracting State may be taxed in the recipient's State, while the source State may also tax that interest but must limit withholding where the beneficial owner is resident in the other State. Exemptions apply to specified governments, public authorities and designated banks, and additional institutions by mutual agreement. Interest covers income from debt-claims but excludes penalty charges. If the beneficial owner carries on business via a permanent establishment or fixed base and the debt is effectively connected, business profit or independent services rules apply. Special-relationship excess interest is limited to an arm's-length amount.
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 limits: source state may tax with capped withholding when beneficial owner is resident elsewhere.
Interest paid to a resident of the other Contracting State may be taxed in the recipient's State, while the source State may also tax that interest but must limit withholding where the beneficial owner is resident in the other State. Exemptions apply to specified governments, public authorities and designated banks, and additional institutions by mutual agreement. Interest covers income from debt-claims but excludes penalty charges. If the beneficial owner carries on business via a permanent establishment or fixed base and the debt is effectively connected, business profit or independent services rules apply. Special-relationship excess interest is limited to an arm's-length amount.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
Join Channel
TaxTMI 
