Artikel XII

It is understood that where the beneficial owner of royalties in respect of leasing, as defined in subparagraph b) of paragraph 4 of Article 12, makes the election as meant in paragraph 5 of Article 12, any interest payable which is attributable to the right or property for which the royalty was received and which is deductable for determining the net basis as meant in paragraph 5 of Article 12 shall be deemed to have a source in the Contracting State in which the leasing payment arises. Any such interest payment, if made to a resident of the other Contracting State, will be subject to the provisions of Article 11 of this Convention. An election made under paragraph 5 of Article 12 shall be made to the competent authority of the Contracting State in which the leasing payment is deemed to have its source.