Taxation of interest: source taxing rights limited for beneficial owners, exemptions for public authorities and central bank. Article 11 limits source taxation of interest paid to a resident beneficial owner by capping withholding tax, provides a lower cap for resident banks, exempts interest beneficially owned by governments and central banks, defines interest to include income from debt-claims, excludes late-payment penalties, disapplies the withholding limitation where interest is effectively connected to a permanent establishment or fixed base (deferring to business or independent services rules), and requires arm's-length adjustment where related-party relationships inflate 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.
Taxation of interest: source taxing rights limited for beneficial owners, exemptions for public authorities and central bank.
Article 11 limits source taxation of interest paid to a resident beneficial owner by capping withholding tax, provides a lower cap for resident banks, exempts interest beneficially owned by governments and central banks, defines interest to include income from debt-claims, excludes late-payment penalties, disapplies the withholding limitation where interest is effectively connected to a permanent establishment or fixed base (deferring to business or independent services rules), and requires arm's-length adjustment where related-party relationships inflate interest.
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