Dividend withholding limitation: source taxation of cross border dividends capped, subject to permanent establishment connection exceptions. Dividends paid by a resident company to a resident of the other Contracting State may be taxed in both States, but where the beneficial owner is resident in the other State the source State's tax on those dividends is limited by a withholding ceiling. 'Dividends' covers income from shares and similar non debt profit participating rights and corporate rights treated as share income. The withholding limitation is inapplicable where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case rules on business profits or independent personal services apply. A State receiving profits from the other Contracting State may not tax dividends to non residents or undistributed profits except in specified resident or PE connected circumstances.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Dividend withholding limitation: source taxation of cross border dividends capped, subject to permanent establishment connection exceptions.
Dividends paid by a resident company to a resident of the other Contracting State may be taxed in both States, but where the beneficial owner is resident in the other State the source State's tax on those dividends is limited by a withholding ceiling. "Dividends" covers income from shares and similar non debt profit participating rights and corporate rights treated as share income. The withholding limitation is inapplicable where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case rules on business profits or independent personal services apply. A State receiving profits from the other Contracting State may not tax dividends to non residents or undistributed profits except in specified resident or PE connected circumstances.
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