Interest withholding: source state taxation limited where the beneficial owner is resident in the other Contracting State. Article 11 allocates taxing rights over interest between Contracting States, permitting taxation in the recipient's residence State while allowing the source State to tax interest subject to a capped withholding where the beneficial owner is resident in the other State; exemptions apply for specified governmental and agreed institutions. Interest is broadly defined as income from debt claims, excludes late payment penalties, and the treaty's withholding limits do not apply where the beneficial owner's interest is effectively connected to a permanent establishment or fixed base in the source State. Related party excess interest is limited to arm's length amounts for treaty relief.
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: source state taxation limited where the beneficial owner is resident in the other Contracting State.
Article 11 allocates taxing rights over interest between Contracting States, permitting taxation in the recipient's residence State while allowing the source State to tax interest subject to a capped withholding where the beneficial owner is resident in the other State; exemptions apply for specified governmental and agreed institutions. Interest is broadly defined as income from debt claims, excludes late payment penalties, and the treaty's withholding limits do not apply where the beneficial owner's interest is effectively connected to a permanent establishment or fixed base in the source State. Related party excess interest is limited to arm's length amounts for treaty relief.
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