Interest taxation rules cap source-state withholding but exempt specified governments and treat PE-connected interest as business income. The treaty allows residence-state taxation of interest paid to its residents but permits source-state taxation subject to a treaty cap when the recipient is the beneficial owner; exemptions apply where interest is derived and beneficially owned by the other State, its political subdivisions, the Central Bank, or agreed governmental agencies. Interest is defined broadly as income from debt-claims, excluding penalty charges. Where the beneficial owner's interest is effectively connected with a permanent establishment or fixed base in the source State, business or independent services rules apply. Special relationships producing excess interest are limited to arm's-length amounts for treaty treatment.