Withholding tax on interest limited for beneficial owners, with exemptions for public and specified financial institutions.

Taxing rights over cross-border interest allocate to both the source State and the recipient's State: the source State may tax interest arising within it but, where the beneficial owner is a resident of the other Contracting State, the tax on gross interest is limited and certain public entities and specified financial institutions of the other State are exempt. Interest is defined as income from debt-claims (excluding penalty charges), deemed to arise where the payer resides or where a permanent establishment or fixed base bears the indebtedness, and amounts inflated by special relationships are confined to arm's-length amounts.

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