DT4159 - DT: Bulgaria: double taxation agreement, Article 10: Interest
- Interest arising in a Contracting State which is derived and
beneficially owned by a resident of the other Contracting State
shall be taxable only in that other State.
- 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, bonds or debentures. Penalty charges
for late payment shall not be regarded as interest for the purpose
of this Article.
- The provisions of paragraph (1) 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
professional 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
a case the provisions of Article 7 or Article 13 of this
Convention, as the case may be, shall apply.
- 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 paid exceeds, for whatever
reason, 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 a case, the excess part of the payments shall
remain taxable according to the law of each Contracting State, due
regard being had to the other provisions of this Convention.
