Taxation on Cross-Border Dividends: 10% Cap for Recipients; Permanent Establishment Exceptions Apply

Dividends paid by a company resident in one Contracting State to a resident of the other Contracting State can be taxed in the recipient's State. These dividends may also be taxed in the payer's State, but if the recipient is a resident of the other State, the tax should not exceed 10% of the gross amount. The term "dividends" includes income from shares or similar rights. Exceptions apply if the recipient has a permanent establishment or fixed base in the payer's State. A State cannot tax dividends paid by a company resident in the other State unless specific conditions are met.

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