Dividend withholding limitation protects beneficial owners but excludes holdings effectively connected to a permanent establishment. Cross-border dividend taxation is divided between the recipient's residence state and the company's residence state; the source state may tax dividends but, where the recipient is the beneficial owner, source taxation is limited to a reduced withholding rate. The term 'dividends' covers income from shares and similar non-debt corporate rights. Source-state withholding limitations do not apply if the beneficial owner carries on business in the source state through a permanent establishment or fixed base and the holding is effectively connected, 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.
Dividend withholding limitation protects beneficial owners but excludes holdings effectively connected to a permanent establishment.
Cross-border dividend taxation is divided between the recipient's residence state and the company's residence state; the source state may tax dividends but, where the recipient is the beneficial owner, source taxation is limited to a reduced withholding rate. The term "dividends" covers income from shares and similar non-debt corporate rights. Source-state withholding limitations do not apply if the beneficial owner carries on business in the source state through a permanent establishment or fixed base and the holding is effectively connected, in which case rules for business profits or independent personal services apply.
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