Dividend tax allocation with limited withholding tax for cross-border dividend payments and exceptions for permanent establishments. Allocation of taxing rights permits the recipient's State to tax dividends while the payer's State may impose a limited withholding tax on dividends paid to a beneficial owner resident of the other State; this restraint does not affect taxation of the payer company's profits. Dividends are defined as income from shares and equivalent profit-participating rights. The withholding provisions do not apply where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the payer's State, where Article 7 or 14 applies, and the other State is generally precluded from taxing such dividends or the payer's undistributed profits except in specified resident or effectively connected circumstances.