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 may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the income from debt-claims, the tax so charged shall not exceed 10 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, income from debt-claims arising in a Contracting State and derived by the Government of the other Contracting State, a local authority and the Central Bank thereof or any financial institution wholly owned by the Government of that other State, or by any other resident of that other State with respect to debt-claims indirectly financed by the Government of that other State, a local authority, and the Central Bank thereof or any financial institution wholly owned by the Government of that State, shall be exempt from tax in the first-mentioned Contracting State.
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Samples: Double Taxation Agreement, Double Taxation Agreement, Agreement for the Avoidance of Double Taxation
