Dividends tax limits set for cross-border payments, with source-state withholding relief and permanent-establishment exceptions. Dividends paid cross-border may be taxed in the recipient's State, but the source State may also tax them subject to reduced withholding where the recipient is the beneficial owner, with lower concessions for qualifying direct shareholders and higher concessions otherwise; this does not affect taxation of the company's profits. Dividend treatment covers income from shares and similar corporate rights. The withholding limits 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 business profits or independent services rules govern. The source State generally may not tax dividends or undistributed profits of its resident company derived from the other State except as provided.