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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) However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the person who receives the interest and is the beneficial owner is a resident of the other Contracting State, tax so charged shall not exceed 10 per cent of the gross amount of interest.

(3) The term "interest" as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage or a right to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures including premiums and prizes attaching to such securities. Penalty charges for late payment shall not be regarded as interest for the purposes of this article.

(4) Notwithstanding the provisions of paragraph (2), interest arising in a Contracting State and paid to the Government, ministries, other government agencies, local authorities, the Central Bank and all other banks whose capital is wholly owned (100 State percent) by the Government of the other Contracting State is exempt from tax in the first-mentioned Contracting State.

(5) The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest is a trade or business through from State a permanent establishment situated therein, an independent personal services from a fixed base situated therein, and the indebtedness of the interest is effectively connected. In this case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

(6) Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a local authority or a resident of that State. However, the person paying the interest, whether he is a resident of a Contracting State has in a Contracting State a permanent establishment or a fixed base, for which the indebtedness on which the interest is paid was incurred, and the burden of these interests, they are considered from the State in which the permanent establishment or fixed base is situated.

(7) Where, by reason of a special relationship between the payer and the recipient or any other person, and third person, the amount of the interest, having regard to the claim for which it is paid, exceeds the amount which would agree upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last. In this case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard to the provisions of this Agreement.