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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) Interests arising in a Contracting State and paid to a resident of the other Contracting State may be taxable in the other Contracting State.

(2) However, the interests may be taxable in the state in which it arises in accordance with the laws of such state, but if the beneficiary is the owner of such interests, the taxes, in such case, shall not exceed 10% of the total interest.

(3) Notwithstanding the provisions abovementioned in paragraph (2), the interests arising in a Contracting state shall be exempted n such state if the interests are owned by:

  • (a) the government, political divisions or local authorities affiliated to the other Contracting state, its bodies and institutions;
  • (b) the central bank of the other Contracting state.

(4) The term "interest", as used in this Article means income from debt-claims of any kind, regardless of whether or not secured by mortgage and whether or not carrying a right to participate in debtors profits, and in particular, income from government securities and income from bonds or debentures including premiums and prizes attached to such securities, bonds or debentures. Penalties for late payment shall not be regarded as interest for the purpose of this Article.

(5) The provisions of paragraphs (1) and (2) of this Article shall not apply if the recipient of 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 or renders in the other State independent personal services from a fixed base situated therein and the debt claims on the basis of which the interest is paid are effectively connected to such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14 of this Convention, as the case may be, shall apply.

(6) Interest shall be deemed to arise in a Contracting State if the payer is that Contracting State, one of its local authorities or a resident of that Contracting State. If, however, a person paying interest, irrespective of whether he is a resident of the Contracting State or not, has in the Contracting State a permanent establishment or a fixed base in connection with which the indebtedness has arisen on which interest is paid and expenditure on payment of such interest is incurred by such permanent establishment or fixed base, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment or the fixed base is situated.

(7) Where, by reason of a special relationship between the payer and the beneficial owner of the interest or between both of them and some other person, the amount of interest, having regard to the debt-claims for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner of such interest, in the absence of such special relationship, then the provisions of this Article shall apply only to the last-mentioned amount. In such a case, the excess part of the payments shall remain taxable in accordance with the laws of each Contracting State, due regard being had to the other provisions of this Convention.