Taxation of cross-border interest: source State may withhold tax subject to treaty caps and limited exemptions.

Interest paid to a resident of the other Contracting State may be taxed by the source State subject to maximum withholding limits, with exemptions where the recipient is the government, local authorities, the central bank, or certain agreed agencies. The treaty excludes source taxation if the recipient's interest is effectively connected to a permanent establishment or fixed base in the source State, in which case business taxation rules apply. Interest is broadly defined to include all debt-claim income and payments above arm's-length are limited to the arm's-length amount for treaty application.

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