Interest taxation: limited source state taxation of cross border interest, with permanent establishment and arm's length exceptions. Interest taxation permits taxation by the recipient's State and by the source State subject to a limited gross basis tax; 'interest' is defined broadly to include securities, bonds, debentures and other income treated as income from money lent. The withholding limit is disapplied when the beneficial owner conducts business via a permanent establishment or provides independent personal services from a fixed base and the indebtedness is effectively connected; in such cases rules for business profits or independent personal services govern. Source is generally the payer's residence or the location of a related permanent establishment or fixed base. Where related party relationships inflate interest, only the arm's length amount is covered by the Article, with the excess taxable under domestic law.