Interest taxation: cross-border interest may be taxed by recipient and source states, with treaty limits and exemptions applying. Interest arising in one Contracting State and paid to a resident of the other may be taxed in the recipient's State, while the source State may also tax such interest subject to a treaty cap for the beneficial owner. Exemptions exist where the payer or recipient is the Government, a local authority, or a wholly owned agency. Interest is defined broadly to include government securities, bonds, debentures and all debt-claims. Interest tied to a permanent establishment is treated as arising in the State of that permanent establishment, and amounts above arm's-length due to special relationships remain taxable under domestic law.
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: cross-border interest may be taxed by recipient and source states, with treaty limits and exemptions applying.
Interest arising in one Contracting State and paid to a resident of the other may be taxed in the recipient's State, while the source State may also tax such interest subject to a treaty cap for the beneficial owner. Exemptions exist where the payer or recipient is the Government, a local authority, or a wholly owned agency. Interest is defined broadly to include government securities, bonds, debentures and all debt-claims. Interest tied to a permanent establishment is treated as arising in the State of that permanent establishment, and amounts above arm's-length due to special relationships remain taxable under domestic law.
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