(1) Interest arising in a Contracting State and paid to a person with permanent residency in the other Contracting State may be taxed in that other State, if the person is the beneficial owner of such interest.
(2) The term "interest" as used in this article shall signify income from debt-claims of every kind-in particular, income from government securities and income from bonds or debentures, including premiums and prizes attached to such securities, bonds or debentures. Fines for overdue payments shall not be deemed to be interest within the framework of this article.
(3) The provisions of paragraphs (1) and (2) shall not apply, if a person who is the beneficial owner of interest, being a permanent resident in a Contracting State, does business in the other Contracting State in which the interest arises through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such cases the provisions of article 7 or article 14 of this Convention shall apply, as required by circumstances.
(4) Where by reason of a special relationship between the payer and the beneficial owner of interest, or between both of them and some other person, the amount of interest paid in respect to the debt-claim for which the interest is paid exceeds the amount which would have been agreed upon by the payer and the beneficial owner of it in the absence of such relationship, the provisions of this article shall apply only to the last-mentioned amount. In such case, the excess part of the payment may be taxable according to the law of each Contracting State, due regard being given to the other provisions of this Convention.