- Any pension (other than a pension of the kind referred to in paragraph (2) of this Article) and any annuity, derived from sources within a Contracting State by an individual who is a resident of the other Contracting State may be taxed in the first-mentioned Contracting State, but if the individual is subject to tax in the other Contracting State in respect of the pension the tax so charged in the first- mentioned Contracting State shall not exceed the lower of
(a) 5 per cent of the pension, or
(b) the amount of the tax chargeable on the pension or annuity in the other Contracting State
- Pensions paid by, or out of funds created by, a Contracting State to an individual for services rendered to that Contracting State in the discharge of governmental functions may be taxed in that Contracting State.
- The term `annuity` means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or money’s worth.