Interest taxation: source-state withholding capped and exemptions for governments and specified financial institutions. Article 11 limits taxation of interest: interest paid to a resident of the other Contracting State may be taxed in that other State, and may also be taxed in the source State but, if the beneficial owner is a resident of the other State, source taxation is capped at ten percent of the gross amount. Exemptions apply where interest is beneficially owned by governments or specified financial institutions, with additional institutions includable by mutual agreement. The Article defines interest broadly, excludes late-payment penalties, treats interest connected to a permanent establishment or fixed base as sourced to that State, and requires arm's-length adjustment 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 withholding capped and exemptions for governments and specified financial institutions.
Article 11 limits taxation of interest: interest paid to a resident of the other Contracting State may be taxed in that other State, and may also be taxed in the source State but, if the beneficial owner is a resident of the other State, source taxation is capped at ten percent of the gross amount. Exemptions apply where interest is beneficially owned by governments or specified financial institutions, with additional institutions includable by mutual agreement. The Article defines interest broadly, excludes late-payment penalties, treats interest connected to a permanent establishment or fixed base as sourced to that State, and requires arm's-length adjustment where related-party relationships inflate interest.
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