Taxation of dividends: source-state tax limited for non-resident beneficial owners, except where dividends are effectively connected to local permanent establishments.

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 where the paying company is resident may tax such dividends subject to a limit of not exceeding 10 per cent of the gross amount where the beneficial owner is resident in the other Contracting State. The Article excludes taxation under these dividend provisions when the holding is effectively connected with a permanent establishment or fixed base, in which case business profits or independent personal services rules apply.

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