Dividend taxation limits: source-state may tax dividends subject to reduced withholding when recipient is the beneficial owner. Dividends may be taxed in the recipient's State, but the payer's State may also tax them with reduced withholding where the recipient is the beneficial owner; withholding is capped at 10% for qualifying corporate shareholders and 15% otherwise. Dividends are defined as income from shares or similar profit-participating rights (not debt-claims). Reduced source withholding does not apply where the holding is effectively connected with a permanent establishment or fixed base, in which case Articles governing business profits or independent personal services apply, and the source State is generally precluded from taxing undistributed profits except in specified connected circumstances.
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: source-state may tax dividends subject to reduced withholding when recipient is the beneficial owner.
Dividends may be taxed in the recipient's State, but the payer's State may also tax them with reduced withholding where the recipient is the beneficial owner; withholding is capped at 10% for qualifying corporate shareholders and 15% otherwise. Dividends are defined as income from shares or similar profit-participating rights (not debt-claims). Reduced source withholding does not apply where the holding is effectively connected with a permanent establishment or fixed base, in which case Articles governing business profits or independent personal services apply, and the source State is generally precluded from taxing undistributed profits except in specified connected circumstances.
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