Taxation of interest: source state may tax, with limited withholding where beneficial owner is resident of the other party. Interest arising in a Contracting Party may be taxed in the payer's state and may also be taxed in the recipient's residence, with a reduced withholding where the beneficial owner is resident of the other Contracting Party; exemptions apply for governments, specified central banking and public financial institutions, and agreed institutions. Preferential treatment is excluded if the beneficial owner operates through a permanent establishment or fixed base in the source state and the debt-claim is effectively connected; sourcing is generally where the payer is resident, arm's length adjustments address amounts inflated by special relationships, and benefits are denied for transactions whose main purpose is treaty advantage.