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in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in that other State.

2.    Interest from governmental bonds of one of the Contracting States shall be taxable only in that State.

3.    Interest within the meaning of paragraph 1 which is paid by a company which is a resident of one of the Contracting States to a person resident in the other State who owns morę than 50 per cent of the share Capital of the debtor company may, notwithstanding the provisions of paragraph 1, be taxed by the first mentioned State; such tax may not, however, exceed 10 per cent of the gross amount of the interest.

4.    The provisions of paragraphs 1 and 3 do not affect the right of the Contracting States to deduct taxes at the fuli ratę from any such interest, but any tax deducted contrary to the provisions of such paragraphs shall be refunded on a claim being madę.

5.    The term “ interest ” as used in this Article means income from Government securities, bonds or debentures, whether or not carrying a right to participate in profits, and debt-claims of every kind as well as all other income assimilated to income from money lent by the taxation law of the State in which the income arises; except where the debt is secured by mortgage on immovable property situated in one of the Contracting States.

6.    The provisions of paragraphs 1, 2 and 3 shall not apply if the recipient of the interest, being a resident of a Contracting State, has in the other Contracting State in which the interest arises a permanent establishment with which the debt-claim from which the interest arises is effectively connected. In such a case, the provisions of Article 7 shall apply.

7.    Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the interest paid, 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 recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that 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.

Article 12

1.    Royalties arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in that other State.

2.    Royalties within the meaning of paragraph 1 which are paid by a company which is a resident of one of the Contracting States to a person resident in the other State who owns morę than 50 per cent of the share capital of the debtor company may, notwithstanding the provisions of paragraph 1, be taxed

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