Dividends taxation limited by treaty with source withholding caps and exceptions for permanent establishment connections. Dividends paid to a resident of the other Contracting State may be taxed by that resident State, while the source State may also tax such dividends but-if the recipient is the beneficial owner-subject to reduced withholding caps that vary by ownership level; the preferential cap in paragraph 2(a) applies only to investments made after signature. 'Dividends' encompasses income from shares and similar profit participating corporate rights. Treaty withholding limits do not apply where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case domestic taxation governs.