Dividend withholding limited where beneficial owner is resident, with source-state tax subject to treaty cap and PE exceptions. Article 10 permits taxation of dividends in the recipient's State while allowing the source State to tax dividends paid by its resident company subject to ... Summary
Dividend withholding limited where beneficial owner is resident, with source-state tax subject to treaty cap and PE exceptions.
Article 10 permits taxation of dividends in the recipient's State while allowing the source State to tax dividends paid by its resident company subject to a treaty ceiling when the beneficial owner is resident in the other State. The provision defines dividends as income from shares and equivalent corporate rights and excludes the withholding limitation where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case business or service income rules apply. The Article also restricts the other State from taxing dividends or undistributed profits except as specified.
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