(1) Interest arising in a Contracting State and paid to a re-
sident of the other Contracting 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 laws of
that State, but if the beneficial owner of the interest is a resident
of the other Contracting State, the tax so charged shall not
exceed 10 per cent of the gross amount of the interest.
(3) Notwithstanding the provisions of paragraph 2,
a) interest arising in the Federal Republic of Germany and paid
in consideration of a loan guaranteed by the Republic of
Ghana in respect of export or foreign direct investment or
paid to the Government of Ghana, the Bank of Ghana, the
Export Development and Investment Fund, the Export
Finance Company, or any other public institution with simi-
lar objectives to those of the said institutions as may be
approved by the competent authorities of the Contracting
States by mutual agreement shall be exempt from German
tax;
b) interest arising in the Republic of Ghana and paid in consid-
eration of a loan guaranteed by the Federal Republic of
Germany in respect of export or foreign direct investment or
paid to the Government of the Federal Republic of Germany,
the Deutsche Bundesbank, the Kreditanstalt für Wiederauf-
bau, the Deutsche Investitions- und Entwicklungsge-
sellschaft or any other public institution with similar objec-
tives to those of the said institutions as may be approved by
the competent authorities of the Contracting States by
mutual agreement shall be exempt from Ghana tax.
(4) Notwithstanding the provisions of paragraph 2, interest
as referred to in paragraph 1 may be taxed only in the Contract-
ing State of which the recipient is a resident if the recipient is the
beneficial owner of the interest and the interest is paid
a) in connection with the sale of commercial or scientific
equipment on credit,
b) in connection with the sale of goods by an enterprise to
another enterprise on credit, or
c) for a loan of any kind made by a bank.
(5) The term “interest” as used in this Article means income
from debt-claims of every kind, whether or not secured by mort-
gage, and in particular, income from government securities and
income from bonds or debentures, including premiums and
prizes attaching to such securities, bonds or debentures. Penalty
charges for late payment shall not be regarded as interest for
the purpose of this Article.
(6) The provisions of paragraphs 1 and 2 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 in
which the interest arises, 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 is effectively
connected with such permanent establishment or fixed base. In
such case the provisions of Article 7 or Article 14, as the case
may be, shall apply.
(7) Interest shall be deemed to arise in a Contracting State
when the payer is a resident of that State. Where, however, the
person paying the interest, whether he is a resident of a Con-
tracting State or not, has in a Contracting State a permanent
establishment or fixed base in connection with which the
indebtedness on which the interest is paid was incurred, and
such interest is borne by such permanent establishment or
fixed base, then such interest shall be deemed to arise in the
State in which the permanent establishment or fixed base is
situated.
(8) 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-claim for which it is paid, exceeds the amount which
would have been agreed upon by the payer 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
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 Agreement.