Taxation of interest: source state may tax but reduced withholding and residence state taxation rules apply to beneficial owners.

Article 11 provides that interest arising in one Contracting State and paid to a resident of the other may be taxed in the recipient's State, while the source State may also tax it subject to a Convention ceiling when the recipient is the beneficial owner. Exceptions permit exclusive residence state taxation where interest is beneficially owned by government entities or specified wholly government owned financial institutions, or where debt claims are government guaranteed or indirectly financed. Interest is broadly defined and special relationship and permanent establishment rules limit Article 11's application.

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