Dividend withholding: source state tax limited when recipient is the beneficial owner, with exceptions for permanent establishments. Dividends paid by a company resident of one Contracting State to a resident of the other may be taxed in the recipient's State but may also be taxed in the source State subject to a capped tax where the recipient is the beneficial owner. 'Dividends' covers income from shares and similar profit-participating rights. The withholding limit does not apply when the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State; in that event, rules for business profits or independent personal services govern. The source State cannot tax such dividends when they derive from the other State except in specified resident or effectively connected cases, nor tax undistributed profits on that basis.
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 withholding: source state tax limited when recipient is the beneficial owner, with exceptions for permanent establishments.
Dividends paid by a company resident of one Contracting State to a resident of the other may be taxed in the recipient's State but may also be taxed in the source State subject to a capped tax where the recipient is the beneficial owner. "Dividends" covers income from shares and similar profit-participating rights. The withholding limit does not apply when the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State; in that event, rules for business profits or independent personal services govern. The source State cannot tax such dividends when they derive from the other State except in specified resident or effectively connected cases, nor tax undistributed profits on that basis.
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