Interest withholding tax limited under treaty; source state's tax on cross-border interest capped when beneficial owner is nonresident. Article 11 limits source taxation of interest paid to a resident beneficial owner to 10% of gross interest while providing exemptions for specified governmental and public financial institutions. Interest is broadly defined as income from debt claims, excludes penalties and amounts treated as dividends, and is deemed to arise where the payer is resident unless tied to a permanent establishment or fixed base, in which case it arises where that establishment or base is situated. Related party excess interest is restricted to an arm's length amount 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 withholding tax limited under treaty; source state's tax on cross-border interest capped when beneficial owner is nonresident.
Article 11 limits source taxation of interest paid to a resident beneficial owner to 10% of gross interest while providing exemptions for specified governmental and public financial institutions. Interest is broadly defined as income from debt claims, excludes penalties and amounts treated as dividends, and is deemed to arise where the payer is resident unless tied to a permanent establishment or fixed base, in which case it arises where that establishment or base is situated. Related party excess interest is restricted to an arm's length amount for treaty relief.
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