Dividend taxation limits protect cross border shareholders, allowing source withholding with PE exceptions and residence taxation. Dividends paid by a company resident of one Contracting State to a resident of the other may be taxed in the recipient's State, while the source State may also tax them but with a withholding limitation where the beneficial owner is resident of the other State; this does not affect taxation of the company's profits. The limitation and residence rule do not apply if the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case the provisions on business profits or independent personal services apply, and the source State may not tax dividends or undistributed profits except in the 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 limits protect cross border shareholders, allowing source withholding with PE exceptions and residence taxation.
Dividends paid by a company resident of one Contracting State to a resident of the other may be taxed in the recipient's State, while the source State may also tax them but with a withholding limitation where the beneficial owner is resident of the other State; this does not affect taxation of the company's profits. The limitation and residence rule do not apply if the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case the provisions on business profits or independent personal services apply, and the source State may not tax dividends or undistributed profits except in the specified circumstances.
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