Dividends taxation cap limits source-state withholding for nonresident beneficial owners, with permanent establishment exceptions and protections. Dividends paid by a resident company may be taxed in the recipient's State, but the source State may also tax them subject to withholding limits when the recipient is the beneficial owner; reduced rates apply for qualifying corporate shareholders and a higher rate for other beneficial owners, with competent authorities to settle application. The Article defines dividends to include income from shares and similar profit-participating rights, and excludes the withholding limitations where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base, in which case rules for business profits or independent personal services apply.
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.
Dividends taxation cap limits source-state withholding for nonresident beneficial owners, with permanent establishment exceptions and protections.
Dividends paid by a resident company may be taxed in the recipient's State, but the source State may also tax them subject to withholding limits when the recipient is the beneficial owner; reduced rates apply for qualifying corporate shareholders and a higher rate for other beneficial owners, with competent authorities to settle application. The Article defines dividends to include income from shares and similar profit-participating rights, and excludes the withholding limitations where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base, in which case rules for business profits or independent personal services apply.
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