Dividend taxation limits: treaty caps source-state withholding on cross-border dividends, subject to PE and fixed-base exceptions.

Dividends paid cross-border may be taxed in the recipient's State, while the payer State may also tax such dividends subject to a treaty withholding limit when the recipient is the beneficial owner. The Article defines dividends to include income from shares and similar profit participating corporate rights. The reduced withholding does not apply if the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the payer State, in which case business profits or independent personal services provisions govern. The payer State may not tax undistributed profits of a resident company arising in the other State.

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