Article 11 Interest
     1. Interest arising in one of the States and paid to a resident of the other State may be taxed in that other State.
     2. However, such interest may also be taxed in the State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 10 percent of the gross amount of the interest.
     3. Notwithstanding the provisions of paragraph 2, interest arising in one of the States shall be exempt from tax in said State if:
a) the person paying the interest is the Government of said State or one of its political or administrative subdivisions or one of its local authorities; or
b) the interest is paid to the Government of the other State, to one of its political or administrative subdivisions, or to one of its local authorities or to institutions or establishments (including financial institutions) which belong wholly to that State, to one of its political or administrative subdivisions, or to one of its local authorities; or
c) the interest is paid to other institutions or establishments (including financial institutions) in respect of financing granted by such institutions or establishments under agreements concluded between the Governments of the States.
     4. The competent authorities of both States shall determine by mutual agreement the conditions governing the application of paragraphs 2 and 3.
     5. The term "interest" as used in this Article means income from public funds, loan obligations, whether or not secured by mortgage, as well as all other revenue classified as income from sums loaned by the tax laws of the State in which the income arises; however, it does not include the income described in Article 10.
     6. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the interest, being a resident of one of the States, carries on a trade or business in the other State in which the interest arises, through a permanent establishment situated therein, or performs in that 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 permanent establishment or fixed base. In such case the interest may be taxed in that other State in accordance with its own domestic laws.
     7. Interest shall be deemed to arise in one of the States when the payer is that State itself, a political or administrative subdivision, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of one of the States or not, has in one of the States a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.
     8. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each State, due regard being had to the other provisions of this Convention.