Common use of Definition of interest payment Clause in Contracts

Definition of interest payment. 1. For the purposes of this Agreement ‘interest payment’ shall mean: (a) interest paid, or credited to an account, relating to debt- claims of every kind including interest paid on fiduciary deposits by Swiss paying agents for the benefit of beneficial owners as defined in Article 4, whether or not secured by mortgage and whether or not carrying 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, bonds or debentures, but excluding interest from loans between private individuals not acting in the course of their business. Penalty charges for late payment shall not be regarded as interest payments; (b) interest accrued or capitalised at the sale, refund or redemption of the debt-claims referred to in (a); (c) income deriving from interest payments either directly or through an entity referred to in Article 4(2) of Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments, hereinafter referred to as the ‘Directive’, distributed by: (i) undertakings for collective investment domiciled in a Member State, (ii) entities domiciled in a Member State, which exercise the option under Article 4(3) of the Directive and which inform the paying agent of this fact, (iii) undertakings for collective investment established outside the territory of the Contracting Parties, (iv) Swiss investment funds which at the time of the entry into force of this Agreement or at a later date are exempted from Swiss anticipatory tax on their payments to individuals who are residents of a Member State. (d) income realised upon the sale, refund or redemption of shares or units in the following undertakings and entities, if they invest directly or indirectly via other undertakings for collective investment or entities referred to below more than 40 % of their assets in debt-claims as referred to in (a): (i) undertakings for collective investment domiciled in a Member State, (ii) entities domiciled in a Member State, which exercise the option under Article 4(3) of the Directive and which inform the paying agent of this fact, (iii) undertakings for collective investment established outside the territory of the Contracting Parties, (iv) Swiss investment funds which at the time of the entry into force of this Agreement or at a later date are exempted from Swiss anticipatory tax on their payments to individuals who are residents of a Member State. 2. As regards subparagraph 1(c), when a paying agent has no information concerning the proportion of the income which derives from interest payments, the total amount of the income shall be considered an interest payment. 3. As regards subparagraph 1(d), when a paying agent has no information concerning the percentage of the assets invested in debt-claims or in shares or units as defined in that subpa- ragraph, that percentage shall be considered to be above 40 %. Where that agent cannot determine the amount of income realised by the beneficial owner, the income shall be deemed to correspond to the proceeds of the sale, refund or redemption of the shares or units. 4. Income relating to undertakings or entities which have invested up to 15 % of their assets in debt-claims within the meaning of subparagraph 1(a) shall not be considered an interest payment in accordance with subparagraph 1(c) and (d). 5. The percentage referred to in subparagraph 1(d) and paragraph 3 shall, as from 1 January 2011, be 25 %. 6. The percentages referred to in subparagraph 1(d) and paragraph 4 shall be determined by reference to the investment policy as laid down in the fund rules or instruments of incor- poration of the undertakings or entities concerned and, failing such rules, by reference to the actual composition of the assets of the undertakings or entities concerned.