Dividend taxation limits under DTAA: source-state withholding permitted but capped when recipient is the beneficial owner.

Dividends between Contracting States may be taxed in the recipient's State but also in the payer's State subject to a withholding tax ceiling when the recipient is the beneficial owner. "Dividends" includes income from shares and similar corporate profit rights. Withholding limitations do not apply where the beneficial owner has a permanent establishment or fixed base in the payer's State and the holding is effectively connected, in which case rules on business profits or independent personal services govern. The source State may not tax dividends paid to nonresidents except in specified connected circumstances, nor tax undistributed profits related to income arising in the other State.

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