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 if such resident is the beneficial owner of the interest.
     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 15 percent of the gross amount of the interest.
     3. Notwithstanding the provisions of paragraph 2:
a) The interest deriving from one of the States and paid with respect to a bond, obligation or other similar security of the government of that State, of the central bank of that State, of a political subdivision or of local authority thereof shall be exempt from taxation in that State;
b) The interest deriving from one of the States and paid with respect to a bond, debenture or other similar security to the government of the other State, to the central bank of the other State, to a political subdivision or local authority thereof shall be exempt from taxation in first-mentioned State;
c) The interest deriving from one of the States and paid with respect to loans under preferential conditions devoted to promoting development and exports, with a term of three years or more, guaranteed or insured by the government of the other State, the central bank of the other State or any agency or organization (including a financial institution) owned by that government, shall be exempt from taxation in first-mentioned State;
d) The interest deriving from one of the States and paid to a recognized pension fund of the other State shall be exempt from taxation in first-mentioned State.
     4. The term "interest" as used in this Article means income from debt-claims 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, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.
     5. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of one of the States, carries on 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 them. In such cases the provisions of Article 7 or Article 14, as the case may be, shall apply.
     6. Interest shall be deemed to arise in one of the States when the payer is that State itself, a political 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.
     7. 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 for any reason 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.
     8. The provisions of this Article shall not apply when the debt-claim for which the interest is paid was granted or assigned principally for the purpose of taking advantage of this Article. In the case where one of the States intends to apply this paragraph, the competent authority of that State shall consult in advance with the competent authority of the other State.