Dividends taxation: source-state withholding limited while residence-state may tax recipient under treaty conditions and connection rules.

Taxation of dividends allocates taxing rights between Contracting States: the recipient's residence may tax received dividends, while the company's residence may also tax them but is subject to a treaty-limited withholding charge where the recipient is the beneficial owner. The term dividends includes income from shares and similar profit-participating rights. Withholding limits do not apply if the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the payer's State, in which case rules for business profits or independent personal services govern.

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