Taxation of interest: source taxation permitted but treaty limits apply when beneficial owner resides in the other State. Article 11 provides that interest may be taxed in the recipient's State and also in the source State, subject to a tax limitation where the beneficial owner is resident in the other State; the competent authorities determine application. Interest is defined as income from debt-claims, excludes penalties, and is excluded from the limitation when effectively connected to a permanent establishment, where Article 7 applies. Deemed-source rules depend on payer residence or permanent establishment bearing the interest, and special-relationship adjustments limit treaty treatment to the arm's length portion.
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.
Taxation of interest: source taxation permitted but treaty limits apply when beneficial owner resides in the other State.
Article 11 provides that interest may be taxed in the recipient's State and also in the source State, subject to a tax limitation where the beneficial owner is resident in the other State; the competent authorities determine application. Interest is defined as income from debt-claims, excludes penalties, and is excluded from the limitation when effectively connected to a permanent establishment, where Article 7 applies. Deemed-source rules depend on payer residence or permanent establishment bearing the interest, and special-relationship adjustments limit treaty treatment to the arm's length portion.
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