Dividend taxation limits: source state tax capped for non-resident beneficial owners; exceptions for permanent establishments. Dividends paid by a resident company to a resident of the other Contracting State may be taxed in the recipient's State; the company's State may also tax such dividends but, where the beneficial owner is a resident of the other State, its tax on the gross dividend is limited to ten percent and company taxation on underlying profits is unaffected. The limitations do not apply when the beneficial owner has a permanent establishment or fixed base in the source State and the holding is effectively connected, in which case rules on business profits or independent personal services govern. The source State may not tax such dividends or undistributed profits except in the specified exceptions.
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: source state tax capped for non-resident beneficial owners; exceptions for permanent establishments.
Dividends paid by a resident company to a resident of the other Contracting State may be taxed in the recipient's State; the company's State may also tax such dividends but, where the beneficial owner is a resident of the other State, its tax on the gross dividend is limited to ten percent and company taxation on underlying profits is unaffected. The limitations do not apply when the beneficial owner has a permanent establishment or fixed base in the source State and the holding is effectively connected, in which case rules on business profits or independent personal services govern. The source State may not tax such dividends or undistributed profits except in the specified exceptions.
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