Taxation of cross-border interest allows source-state tax with reduced withholding, specific exemptions, and permanent establishment exceptions. Article 11 permits taxation of interest in the recipient's State while allowing source-State taxation subject to a reduced withholding when the beneficial owner is a resident of the other State; it exempts interest beneficially owned by specified public authorities and institutions, defines interest broadly excluding late-payment penalties, treats interest connected to a permanent establishment as business profits, establishes deemed-source rules based on the payer or permanent establishment, and limits taxable amounts in cases of special relationships to arm's-length 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.
Taxation of cross-border interest allows source-state tax with reduced withholding, specific exemptions, and permanent establishment exceptions.
Article 11 permits taxation of interest in the recipient's State while allowing source-State taxation subject to a reduced withholding when the beneficial owner is a resident of the other State; it exempts interest beneficially owned by specified public authorities and institutions, defines interest broadly excluding late-payment penalties, treats interest connected to a permanent establishment as business profits, establishes deemed-source rules based on the payer or permanent establishment, and limits taxable amounts in cases of special relationships to arm's-length amounts.
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