Dividend withholding tax cap limits source-state taxation when beneficial owner is resident, subject to permanent establishment exceptions. Taxation of dividends is divided between residence and source States: residence may tax dividend recipients, while the source State may also tax dividends but, when the beneficial owner is resident of the other Contracting State, a withholding tax cap limits that source taxation. The term 'dividends' covers income from shares or similar profit participating rights. Exceptions apply where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case business-income rules govern, and the source State is generally restricted from taxing dividends or undistributed profits except in specified connected 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 withholding tax cap limits source-state taxation when beneficial owner is resident, subject to permanent establishment exceptions.
Taxation of dividends is divided between residence and source States: residence may tax dividend recipients, while the source State may also tax dividends but, when the beneficial owner is resident of the other Contracting State, a withholding tax cap limits that source taxation. The term "dividends" covers income from shares or similar profit participating rights. Exceptions apply where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case business-income rules govern, and the source State is generally restricted from taxing dividends or undistributed profits except in specified connected circumstances.
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