46 | II Série A - Número: 053S1 | 23 de Dezembro de 2014

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paid or the undistribüted profits consist wholly or j5artly of
profits or incorne arising in such other State
Article 11
Interest
1 — Interest 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 intrest may also be taxedin the
Contracting State in which it arises and according to the
1a’s of that State, but if the beneficial owner of the in
terest is a resident of the other Contracting State, the tax
so chargêd shall not exceed 10% of the gross amoúnt
of
the interest. The competent authorities ofthe Contracting
States shall by mutual agreernent settle the mode ofappli
cation ofthis limitation.
3 — The term «interest» as used in this articie means
income from debt-clairns of every kind, whether or not
secured by mortgage and whether or not carrying a right
to participate in the debtor’s profits, and in particular, in
come from government securities and income from bonds
or debentures, including premiums and prizes attaching
to such securities, bonds or debentures. Penalty charges
for late payment shail not be regarded as interest for the
purpose ofthis article.
4 — The provisions ofparagraphs 1 and 2 shall
not ap
ply ifthe beneficial owner ofthe interest, being a resident
of a Contracting State, carnes on business in the other
Contracting State in which the interest arises,
thrcugh
a perrnanent establishment situated therein, or performs
in thàt 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 pernanent stahlishrnent or fixed base. In such case
the provisions of article 7 or article 14, as the case rnay
be, shail apply.
5 — Interest shall be deemed to arise in a CoMracting
Stãte when the payér is a resident of that State. Where,
howevèr, the persõn paying the interest, whether he is a
residéntof a Contracting State or not, has in a Contracting
State a permanent establishment or a fixed base in con
nection with which the indebtedness on which the interest
is paid was incurred, and such interest is borne by uch
perrnanent êstablishment or fixed basé. then such interest
shall be deemed tó arise in the State in which the permanent
establishment or fixed base is situated.
6 — Where, by reason of a special relationship between
thé payer and the beneflcial owner or between both. of
them and some cther person, the amount of the interest,
having regard to the debt-claim for which it ispaid, exce
eds the amount which would have heen ãgreed upon by
the payer and the beneficial owner in the absehce óf such
relationship, the provisions ofthis article shall apply only
tothe last-mentioned amount. In such case, theexcess part
ofthe payments shall remam taxable according to fie laws
ofeach Contracting State, due regard being had to the othcr
pro”isións of this Conventi on.
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