Dividend withholding limitation: source tax capped for beneficial owners; PE-connected holdings taxed as business income. Dividends paid by a resident company to a resident of the other Contracting State may be taxed in the recipient's State, while the source State may also tax such dividends but, where the recipient is the beneficial owner, source tax is limited to a specified maximum of the gross dividend. The source-state reduction does not apply 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 govern.
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 tax capped for beneficial owners; PE-connected holdings taxed as business income.
Dividends paid by a resident company to a resident of the other Contracting State may be taxed in the recipient's State, while the source State may also tax such dividends but, where the recipient is the beneficial owner, source tax is limited to a specified maximum of the gross dividend. The source-state reduction does not apply 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 govern.
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