Interest taxation: reduced source withholding for beneficial owners; exemptions for government and central bank recipients. Interest from debt-claims may be taxed in both residence and source States; where the recipient is the beneficial owner and the debt was created after the Convention's entry into force, source tax is capped at a reduced withholding rate. Exemptions apply for interest beneficially owned by a foreign Government or Central Bank and, subject to government approval, for other residents where the debt transaction promotes industrial development. Interest connected to a business via a permanent establishment or fixed base is taxed under business profits or personal services provisions. Special-relationship adjustments limit treaty relief 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: reduced source withholding for beneficial owners; exemptions for government and central bank recipients.
Interest from debt-claims may be taxed in both residence and source States; where the recipient is the beneficial owner and the debt was created after the Convention's entry into force, source tax is capped at a reduced withholding rate. Exemptions apply for interest beneficially owned by a foreign Government or Central Bank and, subject to government approval, for other residents where the debt transaction promotes industrial development. Interest connected to a business via a permanent establishment or fixed base is taxed under business profits or personal services provisions. Special-relationship adjustments limit treaty relief to arm's-length interest.
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