Dividends withholding limits restrict source-state taxation; preferential lower rate for substantial shareholders, standard treaty rate otherwise.

Dividends may be taxed in the recipient's State but the source State may also tax them subject to treaty withholding limits: a reduced limit for substantial corporate shareholders and a higher limit otherwise. "Dividends" includes income from shares and corporate rights treated as distributions. If the recipient's holding is effectively connected to a permanent establishment or fixed base in the source State, provisions on business profits or independent personal services apply instead. The source State may not tax dividends paid to non-residents or tax undistributed profits of a resident company.

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