Interest taxation: source state may tax with reduced rate when beneficial owner is resident, subject to specified exemptions. 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 statutory limit when the beneficial owner is resident of the other State. Exemptions from source taxation apply for specified governmental and public financial institutions as agreed by Competent Authorities. The Article defines interest broadly, excludes penalty charges, deems interest to arise where the payer or relevant permanent establishment/fixed base is located, and limits treaty benefits to the arm's length portion where related party relationships inflate interest.
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 with reduced rate when beneficial owner is resident, subject to specified exemptions.
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 statutory limit when the beneficial owner is resident of the other State. Exemptions from source taxation apply for specified governmental and public financial institutions as agreed by Competent Authorities. The Article defines interest broadly, excludes penalty charges, deems interest to arise where the payer or relevant permanent establishment/fixed base is located, and limits treaty benefits to the arm's length portion where related party relationships inflate interest.
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