Taxation of interest: source and residence may tax interest, with exemptions for government entities and arm's length adjustments. Article 12 allocates taxing rights over interest: residents may be taxed in their State of residence while the source State may also tax interest subject to a cap. Exemptions cover interest paid to the other Contracting State, local authorities, the central bank or wholly government owned agencies, with authorities able to extend exemptions. Interest includes income from government securities, bonds, debentures and other debt claims. If the recipient's permanent establishment or fixed base in the source State is effectively connected with the debt claim, rules for business profits or independent personal services apply. Special relationships require arm's length adjustment, with excess taxed domestically.