Dividend taxation: source state's levy limited where beneficial owner is resident; residence state may also tax recipients.

Dividends paid by a resident company to a resident of the other Contracting State may be taxed in the recipient's State, but the source State may also tax them subject to a limitation where the beneficial owner is resident in the other State; this limitation does not affect taxation of the company's profits. The reduced treatment does not apply when the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case business income rules govern, and the source State generally may not tax dividends or undistributed profits arising in the other State except in specified connected circumstances.

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