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ARTICLE 11

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

Interest

  1. Interest derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State.

  2. The term “interest” as used in this Article means income from debt clams of every kind, whether or not secured by mortgage, and, in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures, as well as all other income that is treated as income from money lent by the taxation law of the Contracting State in which the income arises. Penalty charges for late payment shall not be regarded as

interest for the purposes of this Convention. However, the term “interest” does not include income dealt with in Article 10 (Dividends).

  1. The provisions of paragraph 1 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 through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt claim in respect of which, the interest is paid forms part of the business property of such permanent establishment or fixed 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.

  2. 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, having regard to the debt clam for which it is paid, exceeds the amount that would have been agreed upon by the payor 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 laws of each Contracting State, due regard being had to the other provisions of this Convention.

  3. Where a company that is a resident of a Contracting State derives profits or income from the other Contracting State, then that other State may not impose any tax on interest paid by the company except insofar as such interest is paid by a permanent establishment of such company located in that other State, or out of income described in paragraph 8 a) bb) of Article 10 (Dividends), or insofar as such interest is paid to a resident of that other State, or insofar as the debt clam underlying such interest payment forms part of the business property of a permanent establishment or a fixed base situated in that other State.

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▸Contents — U.S. Income Tax Treaty — germany tax treaty documents: germany.pdf
U.S. Income Tax Treaty — germany tax treaty documents: germany.pdf

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