Interest taxation: source-state withholding limited while residence retains primary taxing rights with specified exemptions. Cross-border interest is taxable in the recipient's residence, but the source State may tax interest arising there with withholding limited to ten per cent of gross interest when the beneficial owner is resident of the other Contracting State. Interest is exempt in the source State if beneficially owned by the other State, its political subdivisions or local authorities, designated central banks, or agreed government financial institutions. Interest is deemed to arise where the payer is resident, except when a permanent establishment or fixed base bears the indebtedness, in which case it is deemed to arise where that establishment or base is situated. Special-relationship excess is limited to the arm's length amount 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 taxation: source-state withholding limited while residence retains primary taxing rights with specified exemptions.
Cross-border interest is taxable in the recipient's residence, but the source State may tax interest arising there with withholding limited to ten per cent of gross interest when the beneficial owner is resident of the other Contracting State. Interest is exempt in the source State if beneficially owned by the other State, its political subdivisions or local authorities, designated central banks, or agreed government financial institutions. Interest is deemed to arise where the payer is resident, except when a permanent establishment or fixed base bears the indebtedness, in which case it is deemed to arise where that establishment or base is situated. Special-relationship excess is limited to the arm's length amount for treaty relief.
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