Interest taxation: capped source state withholding allowed with exemptions and permanent establishment connection rules. The Article allows residence state taxation of interest while permitting source state withholding subject to a limited cap when the beneficial owner is a resident of the other Contracting State; exemptions are provided for Governments, specified central banking and financial institutions, and other mutually agreed institutions. Interest is defined as income from debt claims (excluding penalty charges), is deemed to arise where the payer is resident unless connected to a permanent establishment or fixed base in another State, and payments above an arm's length amount are confined to the arm's length portion for treaty relief.
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: capped source state withholding allowed with exemptions and permanent establishment connection rules.
The Article allows residence state taxation of interest while permitting source state withholding subject to a limited cap when the beneficial owner is a resident of the other Contracting State; exemptions are provided for Governments, specified central banking and financial institutions, and other mutually agreed institutions. Interest is defined as income from debt claims (excluding penalty charges), is deemed to arise where the payer is resident unless connected to a permanent establishment or fixed base in another State, and payments above an arm's length amount are confined to the arm's length portion for treaty relief.
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