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Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.



(1) Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

(2) Such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State; however, the tax so charged shall not exceed 5% of the gross amount of the interest. However, such interest derived from a Contracting State shall not be subject to tax in this State, in case the other Contracting State in similar cases does not tax such interest in accordance with its laws.

(3) Notwithstanding the provisions of paragraph (2) of this Article, interest may only be taxed in the Contracting State of which the recipient of the interest is a resident, if:

  • (a) the government of one of the Contracting States or, for the Federal Republic of Germany, the German Federal Bank (Deutsche Bundesbank) or, for the Union of Soviet Socialist Republics, the State Bank (Gosbank) of the U.S.S.R. is the recipient of the interest; or
  • (b) the loan for which the interest is paid is guaranteed by the State or an organization authorized thereto by it.

(4) The term "interest" as used in this Article means income from loans, bank deposits, government loans, bonds and debentures as well as all other income which is treated for purposes of taxation as income from loans.

(5) The provisions of paragraphs (1), (2) and (3) of this Article shall not apply if the recipient of the interest, being a resident of a Contracting State, carries on business activities in the other Contracting State in which the interest arises, through a permanent establishment situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment. In such case the provisions of Article 5 of this Convention shall apply.