Introducing the “In Favour Of” filter in Case Laws.
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Introducing the “In Favour Of” filter in Case Laws.
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of <h1>Interest Tax Capped at 10% for Residents of Other State; Exemptions for Governmental Entities and Specified Institutions</h1> Interest arising in one Contracting State and paid to a resident of the other may be taxed in both states, but the tax in the source state is capped at ten percent if the beneficial owner resides in the other state. Exemptions apply when the interest is owned by governmental entities or specified institutions. 'Interest' includes income from debt claims, government securities, bonds, or debentures, excluding penalty charges. The provisions do not apply if the interest is connected to a permanent establishment or fixed base. Interest is deemed to arise where the payer resides or where a permanent establishment bears the interest. Excessive interest due to special relationships is taxable under each state's laws.
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