Dividend taxation under DTAA: source taxation allowed with reduced withholding caps, PE exceptions and an anti abuse main purpose rule apply. Article 11 allocates taxing rights on dividends: the recipient's residence may tax dividends, and the source state may also tax them subject to limited withholding caps agreed by competent authorities; the company's taxation on profits remains unaffected. Dividends are defined as income from shares or similar profit participating rights. Dividends effectively connected with a permanent establishment or fixed base fall under business profits or independent services rules. The Article prevents the source state from taxing dividends derived from the other Contracting State or taxing undistributed profits except in specified cases, and contains an anti abuse main purpose denial of benefits.
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 under DTAA: source taxation allowed with reduced withholding caps, PE exceptions and an anti abuse main purpose rule apply.
Article 11 allocates taxing rights on dividends: the recipient's residence may tax dividends, and the source state may also tax them subject to limited withholding caps agreed by competent authorities; the company's taxation on profits remains unaffected. Dividends are defined as income from shares or similar profit participating rights. Dividends effectively connected with a permanent establishment or fixed base fall under business profits or independent services rules. The Article prevents the source state from taxing dividends derived from the other Contracting State or taxing undistributed profits except in specified cases, and contains an anti abuse main purpose denial of benefits.
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