Withholding tax on cross-border interest capped for resident beneficial owners; source taxation except for public bodies and PE. The Article permits taxation of interest in the recipient's State of residence but allows source-state taxation limited by a specified withholding cap when the beneficial owner resides in the other Contracting State. Exceptions grant exclusive source or residence taxation when interest is paid to designated public or state-owned bodies, and guaranteed loans to such bodies are taxed only in the other State. Interest is defined to include income from all debt-claims (excluding late-payment penalties), arises where the payer is resident unless connected to a PE or fixed base, and related-party excess interest is disallowed from treaty benefits and remains taxable under domestic law.
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.
Withholding tax on cross-border interest capped for resident beneficial owners; source taxation except for public bodies and PE.
The Article permits taxation of interest in the recipient's State of residence but allows source-state taxation limited by a specified withholding cap when the beneficial owner resides in the other Contracting State. Exceptions grant exclusive source or residence taxation when interest is paid to designated public or state-owned bodies, and guaranteed loans to such bodies are taxed only in the other State. Interest is defined to include income from all debt-claims (excluding late-payment penalties), arises where the payer is resident unless connected to a PE or fixed base, and related-party excess interest is disallowed from treaty benefits and remains taxable under domestic law.
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