Dividend withholding limits protect cross-border beneficial owners while preserving permanent establishment connections for business taxation. Article 11 allows taxation of dividends in the recipient's State while permitting the source State to tax dividends from resident companies subject to a ... Summary
Dividend withholding limits protect cross-border beneficial owners while preserving permanent establishment connections for business taxation.
Article 11 allows taxation of dividends in the recipient's State while permitting the source State to tax dividends from resident companies subject to a capped withholding when the recipient is the beneficial owner. "Dividends" cover income from shares and profit-participating rights. The dividend rules are displaced where the beneficial owner's shareholding is effectively connected with a permanent establishment or fixed base in the source State; in that case rules for business profits or independent personal services apply. The source State is restricted from taxing dividends or undistributed profits beyond these provisions.
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