o বাংলাদেশ গেজেট, অতিরিক্ত জানান্নারী ৩, ১৯৮৯ ARTICLE 11 INTEREST 1. Interest arising in a State 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 in the beneficial owner of the interest the tax so charged shall not exceed 13 per cent of the gross amount of the interest. 3. Notwithstanding the provisions of paragraphs 1 and 2, interest derived by a State, its central bank, or related to loans financed or guaranteed directly or indirectly by a public instrumentality of that State in charge of the financing of external trade shall be exempt from tax in the other State. 4. The term "interest" as used in this Article Ileans income from debtclaims 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, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. 5. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the interest, being a resident of a State 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 setwices 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, as the case may be, shall երբly. 5. Interest shall be deemed to arise in a State when the payer is that State itself, a local authority, a statutory body or a resident of that State. Where, however, the person paying the interest, whether he is a resident of State or not has in a State a permanent establishment or fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such perпапепt establishпепt or fixed base, then such interest shall be deemed to arise in the State in which the permanent establish. mont or fixed base is situated.
