Dividend taxation: source territory tax limited where the beneficial owner resides in the other territory, with connection exceptions. The treaty permits the residence of a dividend recipient to tax dividends but allows the source territory to tax such dividends up to a capped rate when the recipient is the beneficial owner. 'Dividends' covers income from shares and equivalent corporate rights, excluding debt-claims, and does not affect taxation of the payer's profits. Reduced-source-tax rules do not apply where the beneficial owner's holding is effectively connected to a permanent establishment or fixed base in the source territory; in such cases business or independent services articles govern. The source territory is generally restricted from taxing dividends and undistributed profits derived from the other territory except for resident recipients or effectively connected holdings.
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 territory tax limited where the beneficial owner resides in the other territory, with connection exceptions.
The treaty permits the residence of a dividend recipient to tax dividends but allows the source territory to tax such dividends up to a capped rate when the recipient is the beneficial owner. "Dividends" covers income from shares and equivalent corporate rights, excluding debt-claims, and does not affect taxation of the payer's profits. Reduced-source-tax rules do not apply where the beneficial owner's holding is effectively connected to a permanent establishment or fixed base in the source territory; in such cases business or independent services articles govern. The source territory is generally restricted from taxing dividends and undistributed profits derived from the other territory except for resident recipients or effectively connected holdings.
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