Article 11 Interest
     1. Interest arising in Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
     2. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient of the interest is the beneficial owner of the interest the tax so charged shall not exceed:
a) 2 per cent of the gross amount of interest, in the case of:
i) interest arising in a Contracting State and paid on any loans of whatever kind granted by a bank or any other financial institution of the other Contracting State, including investment banks and savings banks, and insurance companies; or
ii) interest arising in a Contracting State and paid by the purchaser of machinery and equipment to the seller of the machinery and equipment in connection with a sale on credit;)
b) 10 per cent of the gross amount of the interest in all other cases.
     3. Notwithstanding the provisions of paragraph 2 of this Article:
a) interest arising in a Contracting State and paid in respect of a bond, debenture or other similar obligation of the Government of that State, the central bank of that State, a political subdivision or local authority thereof shall be exempt from tax in that State;
b) interest arising in a Contracting State and paid in respect of a bond, debenture or other similar obligation to the Government of the other Contracting State, the central bank of the other Contracting State, a political subdivision or local authority thereof shall be exempt from tax in the first-mentioned State; and
c) interest arising in a Contracting State and paid in respect of loans guaranteed or insured by the Government of the other Contracting State, the central bank of the other Contracting State or any agency or instrumentality (including a financial institution) owned or controlled by that Government, shall be exempt from tax in the first-mentioned State.
     4. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of paragraphs 2 and 3 of this Article.
     5. The term "interest" as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage, and whether of 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, bonds or debentures, and including penalty charges for late payment.
     6. The provisions of paragraphs 1, 2 and 3 of this Article shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting 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 provisions of Article 7 or Article 14 of this Convention, as the case may be, shall apply.
     7. Interest shall be deemed to arise in a Contracting State 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 a Contracting State or not, has in a Contracting State 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 Contracting 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 Contracting State, due regard being had to the other provisions of this Convention.
     9. The provisions of this Article shall not apply if the debt-claim in respect of which the interest is paid was created or assigned mainly for the purpose of taking advantage of this Article. In case a Contracting State intends to apply this paragraph, its competent authority shall in advance consult with the competent authority of the other Contracting State.