Dividend taxation: source state withholding limited when beneficial owner resides in the other Contracting State, with exceptions for permanent establishments. Dividends paid by a company resident in one Contracting State to a resident of the other may be taxed in the recipient's State, but the source State may also tax them; if the beneficial owner resides in the other State, source State withholding on such dividends is limited to 5 per cent of the gross amount. The withholding limit 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 rules on business profits or independent personal services govern. The Article also prevents the source State from taxing dividends derived from the other Contracting State or taxing undistributed profits except in specified 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 taxation: source state withholding limited when beneficial owner resides in the other Contracting State, with exceptions for permanent establishments.
Dividends paid by a company resident in one Contracting State to a resident of the other may be taxed in the recipient's State, but the source State may also tax them; if the beneficial owner resides in the other State, source State withholding on such dividends is limited to 5 per cent of the gross amount. The withholding limit 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 rules on business profits or independent personal services govern. The Article also prevents the source State from taxing dividends derived from the other Contracting State or taxing undistributed profits except in specified circumstances.
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