Interest withholding tax cap limits source taxation on cross-border interest when the recipient is the beneficial owner. The DTAA permits residence-state taxation of cross-border interest but allows source-state taxation subject to a reduced withholding limit when the beneficial owner is resident in the other Contracting State. Certain government entities and designated public financial institutions are exempt at source when they beneficially own the interest, and reciprocal exemptions apply for interest on loans or credits guaranteed or insured by those bodies. Exemptions and reduced rates do not apply if the beneficial owner carries on business through a permanent establishment or fixed base and the debt-claim is effectively connected with it; arm's-length adjustments limit treaty relief where related-party relationships inflate interest.