Dividend tax limitation: source-state withholding capped for beneficial owners, with permanent-establishment connections altering treatment and residence-state taxation permitted. Dividend payments by a company resident in one Contracting State may be taxed in the recipient's State, but the source State may also tax such dividends; when the recipient is the beneficial owner the source State's tax is limited by prescribed rates and the competent authorities shall agree the mode of applying these limitations. The limitation does not apply where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case the rules on business profits or independent personal services govern, and the source State may not tax dividends except in specified resident or effectively connected circumstances nor tax undistributed profits.
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 tax limitation: source-state withholding capped for beneficial owners, with permanent-establishment connections altering treatment and residence-state taxation permitted.
Dividend payments by a company resident in one Contracting State may be taxed in the recipient's State, but the source State may also tax such dividends; when the recipient is the beneficial owner the source State's tax is limited by prescribed rates and the competent authorities shall agree the mode of applying these limitations. The limitation does not apply where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case the rules on business profits or independent personal services govern, and the source State may not tax dividends except in specified resident or effectively connected circumstances nor tax undistributed profits.
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