Skip to content
ChatProjectCodes

ARTICLE 11

U.S. Income Tax Treaty — barbados tax treaty documents: barbados.pdf · 2026-10-03 edition · updated 2026-10-04 · United States

Interest

  1. Where interest is derived from sources within a Contracting State and beneficially owned by a resident of the other Contracting State, the rate of tax imposed thereon in the first-mentioned State shall not exceed 12.5 percent of the gross amount of the interest. Notwithstanding the preceding sentence, interest derived from sources within a Contracting State, beneficially owned by a resident of the other Contracting State, and paid in respect of a bond, debenture or other similar obligation issued, guaranteed or insured by the government of that Contracting State or by a political subdivision, local authority or instrumentality thereof shall be taxable only in that other State.

  2. The term "interest" as used in the Convention means income from loans 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 or prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purposes of this Convention.

  3. The provisions of paragraph 1 shall not apply if the recipient of the interest, being a resident of a Contracting State, carries on in the other Contracting State in which the interest arises a business through a permanent establishment situated therein, or performs in that other State independent personal services from a regular base situated therein, and the indebtedness in respect of which the interest is paid is effectively connected with that permanent establishment or regular base. In such a case, the provisions of Article 7 (Business Profits) or Article 14 (Independent Personal Services) as the case may be, shall apply.

  4. 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, having regard to the indebtedness on 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 Agreement.

Get a plain-English answer with a citation back to this text.

Ask AI about this code
Export this section
▸Contents — U.S. Income Tax Treaty — barbados tax treaty documents: barbados.pdf
U.S. Income Tax Treaty — barbados tax treaty documents: barbados.pdf

GoCodebook provides public access, search, citation, multilingual explanation, and practical interpretation of legally adopted building regulations. It is not a substitute for the official ICC or California code publications.