Taxation of interest: source state's withholding limited while residence taxation applies; exemptions and permanent establishment rules govern treatment. Article 11 permits residence taxation of interest and allows source taxation subject to a reduced withholding limit when the recipient is the beneficial owner; exemptions cover government payers, central banks and agreed agencies, and specified export credit related interest is taxable only in the borrower's residence. Interest is defined broadly as income from debt claims; interest borne by a permanent establishment or fixed base is deemed to arise in the State of that establishment, and where the beneficial owner's activities connect the debt claim to a permanent establishment or fixed base, business or independent personal services rules apply. Amounts exceeding arm's length interest because of special relationships may be adjusted and taxed under domestic law.