Interest taxation: source State may tax interest but withholding on cross border payments to residents is limited; exemptions and PE connection apply. Interest paid to a resident of the other Contracting State may be taxed in the recipient's State, while the source State may also tax such interest subject to a limited withholding where the beneficial owner is a resident of the other Contracting State. Exemptions apply for certain public entities and approved transactions. Interest is defined as income from debt claims; source is generally where the payer resides unless a permanent establishment or fixed base bears the indebtedness. Related party excess interest is limited to an arm's length amount.
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 may tax interest but withholding on cross border payments to residents is limited; exemptions and PE connection apply.
Interest paid to a resident of the other Contracting State may be taxed in the recipient's State, while the source State may also tax such interest subject to a limited withholding where the beneficial owner is a resident of the other Contracting State. Exemptions apply for certain public entities and approved transactions. Interest is defined as income from debt claims; source is generally where the payer resides unless a permanent establishment or fixed base bears the indebtedness. Related party excess interest is limited to an arm's length amount.
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