Dividends taxation: source state may tax but withholding on payments to non-resident beneficial owners capped, with PE exceptions. Dividends payable by a company resident in one Contracting State to a resident of the other State may be taxed in the recipient's State, but the payer's State may also tax such dividends subject to a withholding not exceeding 10 per cent of the gross amount where the beneficial owner is a resident of the other State; this withholding limitation does not affect taxation of the distributing company's profits. The dividend definition includes income from shares and similar profit-participating rights, and source-tax limits do not apply where the holding is effectively connected with a permanent establishment or fixed base in the payer's State, in which case business profits or independent services rules govern. The other State may not tax dividends paid by a resident company or tax undistributed profits except in the specified resident or effectively connected situations.