Dividend taxation: treaty limits source withholding and shifts treatment when holdings are effectively connected to a permanent establishment. Dividend taxation under the DTAA permits taxation by the recipient's residence State but allows the source State to tax dividends paid by its resident companies; where the recipient is the beneficial owner, source taxation is limited to 10% of gross dividends. 'Dividends' include income from shares and similar corporate profit-participating rights. The withholding limit does not apply if the beneficial owner has a permanent establishment or fixed base in the source State and the holding is effectively connected, in which case business profits or independent services rules govern. The source State may not tax such dividends or undistributed profits except as specified.
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: treaty limits source withholding and shifts treatment when holdings are effectively connected to a permanent establishment.
Dividend taxation under the DTAA permits taxation by the recipient's residence State but allows the source State to tax dividends paid by its resident companies; where the recipient is the beneficial owner, source taxation is limited to 10% of gross dividends. "Dividends" include income from shares and similar corporate profit-participating rights. The withholding limit does not apply if the beneficial owner has a permanent establishment or fixed base in the source State and the holding is effectively connected, in which case business profits or independent services rules govern. The source State may not tax such dividends or undistributed profits except as specified.
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