Dividend taxation limits on source withholding protect cross-border shareholders while preserving source-state taxing rights. Dividends paid by a resident company to a resident of the other Contracting State may be taxed in the recipient's State, but the source State may also tax them subject to withholding limits where the beneficial owner resides in the other State, including a reduced rate when the beneficial owner is a company holding a qualifying equity interest; these limits do not affect taxation of the distributing company on underlying profits. The Article defines dividends to include income from shares and similar rights and exempts the reduced-source-tax rules where the holding is effectively connected to a permanent establishment or fixed base.
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 on source withholding protect cross-border shareholders while preserving source-state taxing rights.
Dividends paid by a resident company to a resident of the other Contracting State may be taxed in the recipient's State, but the source State may also tax them subject to withholding limits where the beneficial owner resides in the other State, including a reduced rate when the beneficial owner is a company holding a qualifying equity interest; these limits do not affect taxation of the distributing company on underlying profits. The Article defines dividends to include income from shares and similar rights and exempts the reduced-source-tax rules where the holding is effectively connected to a permanent establishment or fixed base.
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