Dividend withholding limits under the treaty restrict source-state taxation while preserving beneficial-owner and permanent-establishment exceptions for cross-border distributions.

Cross-border dividend taxation grants residence-state taxing rights while allowing source-state taxation subject to treaty caps on tax charged to the beneficial owner; domestic taxation of company profits remains unaffected. "Dividends" covers income from shares and similar profit-participating rights. Treaty withholding does 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 business profits or independent personal services rules govern. The source State generally may not tax dividends or undistributed profits except when paid to its resident or when effectively connected with a local permanent establishment.

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