Interest taxation: source taxing rights limited by treaty with exemptions for government and public financing institutions. Article 12 allocates taxing rights on interest: interest paid to a resident may be taxed in the recipient's State, while the source State may also tax it subject to a reduced treaty rate when the recipient is the beneficial owner. Specific exemptions apply for interest beneficially owned by governments, designated central banking or public development institutions, and for interest connected with loans or credits backed by specified public export finance institutions. Interest connected to a permanent establishment or fixed base is taxed as business or service income, and special relationship adjustments limit treaty application to arm's length 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 taxing rights limited by treaty with exemptions for government and public financing institutions.
Article 12 allocates taxing rights on interest: interest paid to a resident may be taxed in the recipient's State, while the source State may also tax it subject to a reduced treaty rate when the recipient is the beneficial owner. Specific exemptions apply for interest beneficially owned by governments, designated central banking or public development institutions, and for interest connected with loans or credits backed by specified public export finance institutions. Interest connected to a permanent establishment or fixed base is taxed as business or service income, and special relationship adjustments limit treaty application to arm's length interest.
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