Common use of Income from Debt-Claims Clause in Contracts

Income from Debt-Claims. 1. Income from debt-claims 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 income from debt-claims may also be taxed in the Contracting State in which it arises, and according to the law of that State, but if the recipient is the beneficial owner of the income from debt-claims, the tax so charged shall not exceed 5 percent of the gross amount of the income from debt-claims. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation. 3. Notwithstanding the provisions of paragraph 2 of this Article, income from debt-claims arising in a Contracting State and paid to a resident of the other Contracting State, being the beneficial owner of such income, shall be taxable only in that other Contracting State if such income: (a) is paid by the Government of a Contracting State, a political or administrative subdivision or local authority thereof; or (b) is paid to the Government of the other Contracting State, a political or administrative subdivision or a local authority thereof; or (c) is paid to the central bank of the other Contracting State or a corporate body (including financial institutions) controlled or owned by that State, a political or administrative subdivision or local authority thereof.

Income from Debt-Claims. 1. Income from debt-claims 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 income from debt-claims may also be taxed in the Contracting State in which it arises, and according to the law of that State, but if the recipient is the beneficial owner of the income from debt-debt- claims, the tax so charged shall not exceed 5 percent of the gross amount of the income from debt-claims. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation. 3. Notwithstanding the provisions of paragraph 2 of this Article, income from debt-claims arising in a Contracting State and paid to a resident of the other Contracting State, being the beneficial owner of such income, shall be taxable only in that other Contracting State if such income: (a) is paid by the Government of a Contracting State, a political or administrative subdivision or local authority thereof; or (b) is paid to the Government of the other Contracting State, a political or administrative subdivision or a local authority thereof; or (c) is paid to the central bank of the other Contracting State or a corporate body (including financial institutions) controlled or owned by that State, a political or administrative subdivision or local authority thereof.