Taxation of interest: source state may tax interest but withholding limited when beneficial owner is resident of other State. Article 11 permits taxation of interest in the recipient's State while allowing the source State to tax interest subject to a withholding tax limitation when the beneficial owner is resident of the other State; competent authorities shall settle application of that limitation. Exemptions apply where the debtor or recipient is a Contracting State or its subdivisions or where interest relates to intergovernmental finance. Interest is defined to include income from debt-claims, securities and bonds, excluding penalty charges. Source-tax limits do not apply if the beneficial owner's interest is effectively connected with a permanent establishment or fixed base in the source State, in which case business or personal service provisions apply.
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 state may tax interest but withholding limited when beneficial owner is resident of other State.
Article 11 permits taxation of interest in the recipient's State while allowing the source State to tax interest subject to a withholding tax limitation when the beneficial owner is resident of the other State; competent authorities shall settle application of that limitation. Exemptions apply where the debtor or recipient is a Contracting State or its subdivisions or where interest relates to intergovernmental finance. Interest is defined to include income from debt-claims, securities and bonds, excluding penalty charges. Source-tax limits do not apply if the beneficial owner's interest is effectively connected with a permanent establishment or fixed base in the source State, in which case business or personal service provisions apply.
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