Dividend taxation limits: source-state tax on cross-border dividends capped; exceptions apply for permanent establishments and connected holdings. Taxation of cross-border dividends is shared: dividends paid by a resident company to a resident of the other State may be taxed in the recipient's State and also in the source State subject to a tax ceiling where the recipient is the beneficial owner. The Article defines dividends to include income from shares and similar profit-participating corporate rights. The source-State cap varies by ownership level and does not affect taxation of the company on profits. Where the beneficial owner has a permanent establishment or fixed base in the source State and the holding is effectively connected, rules on business profits or independent personal services govern instead; the source State generally may not tax dividends or undistributed profits unless the recipient is resident there or the holding is effectively connected.
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 limits: source-state tax on cross-border dividends capped; exceptions apply for permanent establishments and connected holdings.
Taxation of cross-border dividends is shared: dividends paid by a resident company to a resident of the other State may be taxed in the recipient's State and also in the source State subject to a tax ceiling where the recipient is the beneficial owner. The Article defines dividends to include income from shares and similar profit-participating corporate rights. The source-State cap varies by ownership level and does not affect taxation of the company on profits. Where the beneficial owner has a permanent establishment or fixed base in the source State and the holding is effectively connected, rules on business profits or independent personal services govern instead; the source State generally may not tax dividends or undistributed profits unless the recipient is resident there or the holding is effectively connected.
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