Dividend taxation cap on source-state withholding preserves residence taxation while protecting permanent establishment connectivity. Article 10 allocates dividend taxation: dividends may be taxed in the recipient's State but the source State may tax them subject to a treaty withholding cap; 'dividends' covers income from shares and equivalent rights. The treaty's reduced source taxation is inapplicable where 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 personal services rules govern; the source State also generally may not tax dividends of a resident company derived from the other State or tax undistributed profits except where payments are to its residents or are effectively connected with a permanent establishment.
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 cap on source-state withholding preserves residence taxation while protecting permanent establishment connectivity.
Article 10 allocates dividend taxation: dividends may be taxed in the recipient's State but the source State may tax them subject to a treaty withholding cap; "dividends" covers income from shares and equivalent rights. The treaty's reduced source taxation is inapplicable where 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 personal services rules govern; the source State also generally may not tax dividends of a resident company derived from the other State or tax undistributed profits except where payments are to its residents or are effectively connected with a permanent establishment.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
Join Channel
TaxTMI 
