Interest withholding: source-state taxation allowed but limited when the beneficial owner is resident across borders. Cross-border interest may be taxed by the residence state and by the source state, but source taxation of interest payable to the beneficial owner resident in the other Contracting State is limited; exemptions apply for public entities and specified financial institutions. Interest is defined broadly as income from debt claims excluding penalty charges. Where the beneficial owner carries on business through a permanent establishment or fixed base to which the debt is effectively connected, provisions on business profits or independent personal services govern. Interest is deemed to arise where the payer resides unless attributable to a permanent establishment or fixed base, and amounts above arm's-length are excluded from the Article's treatment.
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 allowed but limited when the beneficial owner is resident across borders.
Cross-border interest may be taxed by the residence state and by the source state, but source taxation of interest payable to the beneficial owner resident in the other Contracting State is limited; exemptions apply for public entities and specified financial institutions. Interest is defined broadly as income from debt claims excluding penalty charges. Where the beneficial owner carries on business through a permanent establishment or fixed base to which the debt is effectively connected, provisions on business profits or independent personal services govern. Interest is deemed to arise where the payer resides unless attributable to a permanent establishment or fixed base, and amounts above arm's-length are excluded from the Article's treatment.
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