Interest taxation under treaty permits source-state taxation subject to capped withholding and exemptions for governments and central banks. Article 11 permits source state taxation of interest paid to a resident of the other Contracting State but limits that source tax where the recipient is the beneficial owner; it defines interest broadly, treats interest as arising where the payer or an affected permanent establishment is situated, provides that connection to a permanent establishment negates withholding relief in favour of business income rules, allows related party adjustments to arm's length amounts, includes an anti abuse principal purpose provision, and exempts interest beneficially owned by foreign governments and central banks.
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 under treaty permits source-state taxation subject to capped withholding and exemptions for governments and central banks.
Article 11 permits source state taxation of interest paid to a resident of the other Contracting State but limits that source tax where the recipient is the beneficial owner; it defines interest broadly, treats interest as arising where the payer or an affected permanent establishment is situated, provides that connection to a permanent establishment negates withholding relief in favour of business income rules, allows related party adjustments to arm's length amounts, includes an anti abuse principal purpose provision, and exempts interest beneficially owned by foreign governments and central banks.
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