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HMRC internal manual

Double Taxation Relief Manual

HM Revenue & Customs
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DT: Trinidad and Tobago: double taxation agreement, Article 11: Interest

(1) Interest arising in a Contracting State which is derived by a resident of the otherContracting 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 law of that State; but where the beneficial owner of such interest isa resident of the other Contracting State the tax so charged shall not exceed 10 per centof the gross amount of the interest.

(3) Notwithstanding the provisions of paragraph (2) of this Article, interest arising in aContracting State shall be exempt from tax in that State if it is derived and beneficiallyowned by the Government of the other Contracting State or a local authority thereof or anyagency or instrumentality of that Government or local authority.

(4) The term `interest` as used in this Article means income from debtclaims of everykind, whether or not secured by mortgage, and whether or not carrying a right toparticipate in the debtor’s profits, and in particular, income from government securitiesand income from bonds or debentures but shall not include any item which is treated as adistribution under the provisions of Article 10 of this Convention.

(5) The provisions of paragraphs (1) and (2) of this Article shall not apply if thebeneficial owner of the interest, being a resident of a Contracting State, carries onbusiness in the other Contracting State in which the interest arises, through a permanentestablishment situated therein, and the debt-claim in respect of which the interest ispaid is effectively connected with such permanent establishment. In such case, theprovisions of Article 7 shall apply.

(6) Interest shall be deemed to arise in a Contracting State when the payer is that Stateitself, 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 Stateor not, has in a Contracting State a permanent establishment in connection with which theindebtedness on which the interest is paid was incurred, and such interest is borne bythat permanent establishment, then such interest shall be deemed to arise in the State inwhich the permanent establishment is situated.

(7) Where, by reason of a special relationship between the payer and the beneficial owneror 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 thebeneficial owner in the absence of such relationship, the provisions of this Article shallapply only to the lastmentioned amount. In such case, the excess pan of the payment shallremain taxable according to the law of each Contracting State, due regard being had to theother provisions of this Convention.